The calculator

On-cost calculation for UK recruitment agencies (holiday, NI, pension, levy)

Holiday, NI, pension, levy, finance — what each one is, where you change the default, and how the live cost breakdown shows the maths.

For each enabled shift we take the worker's base pay rate and add the layers below to get the true cost per hour. The bill rate is then the true cost divided by (1 - margin) — or pay + cover + margin in fixed mode. The proposal preview shows every layer of the calculation in plain numbers, per shift.

Cost Breakdown Per Hour table in the proposal preview showing rows for Base Pay, Holiday Pay (12.07%), Employers NI (15%), Pension (3%), Apprenticeship Levy (0.56%), and True Employment Cost across multiple shift columns
The "Cost Breakdown Per Hour" table renders live as you edit pay rates. Every line is the maths your bill rate is built from.

Default on-cost stack

Holiday pay12.07% — the statutory accrual rate for casual workers
Employer's NI15% — current HMRC rate above the secondary threshold
Pension3% — minimum employer auto-enrolment contribution
Apprenticeship levy0.50% — only applies above £3m pay bill but we include it by default for accuracy

NI calculation modes

"Compound" is HMRC standard: NI is calculated on base pay PLUS holiday pay (because holiday pay is itself earnings). "Flat" is NI on base pay only — sometimes used by clients who accrue holiday separately. You can switch per quote from the NI calc strip in the proposal builder.

NI calc strip in the proposal builder showing the Employer NI Calc label and a two-button toggle between Compound and Flat with an italic explainer line below
The NI calc strip lives at the top of the rates panel. Switching to Flat outlines the strip green so you remember the override is on for this quote.

Where to change the defaults

Settings → Sectors → pick a sector → "Quote defaults". Each sector keeps its own copy of these percentages, so a healthcare bucket can carry NHS-specific defaults without polluting a driving bucket.

Quote defaults sub-tab in the sector detail view showing the Holiday / Employer NI / Pension / Levy / Margin / Payment days editable fields
Per-sector defaults. Change a value here and every new quote in that sector picks up the new number.

Per-quote overrides

In the proposal builder, open the Finance Settings section. You can override holiday / NI / pension / levy and the finance percentage for that single quote without touching the sector defaults.

Finance Settings section expanded in the proposal builder showing override fields for holiday, NI, pension, levy and finance percentage plus payment terms
Override any percentage for this single quote. The sector defaults stay untouched.

Related articles

Last updated: 2026-06-29. Did this not answer your question? Click the chat bubble bottom-right or email hello@ratecalc.io.

← Back to all articles