Last reviewed: 10 July 2026
Short answer: At the 2025-26 London Living Wage of £14.80 per hour, a 37.5-hour working week produces a £28,860 annual salary. Applying the standard 2026-27 employer National Insurance rate and minimum automatic-enrolment pension contribution gives an illustrative minimum employer cost of about £33,118.
This page records a transparent labour-cost benchmark. It is not a price for AI software, a forecast of savings, or an argument that a person and an automated system are interchangeable.
The reference calculation
The illustrative annual figures are:
| Item | Calculation | Amount |
|---|---|---|
| Gross salary | £14.80 × 37.5 hours × 52 weeks | £28,860.00 |
| Employer National Insurance | 15% of earnings above £5,000 | £3,579.00 |
| Minimum employer pension | 3% of qualifying earnings above £6,240 | £678.60 |
| Illustrative minimum employer cost | Salary + NI + pension | £33,117.60 |
Rounded to the nearest pound, that is £33,118 per year.
For a 40-hour week, gross salary alone would be £30,784. Employer National Insurance and pension would increase with it.
Sources and assumptions
The hourly rate is the Living Wage Foundation’s London Living Wage for 2025-26. It is a voluntary real living wage, distinct from the statutory National Living Wage.
For the 2026-27 tax year, HMRC lists the standard employer National Insurance rate as 15% above the £5,000 annual secondary threshold. The Pensions Regulator lists the lower level of qualifying earnings as £6,240, and the statutory minimum employer contribution is normally 3% of qualifying earnings.
- Living Wage Foundation calculation and 2025-26 rates
- HMRC rates and thresholds for employers, 2026 to 2027
- The Pensions Regulator automatic-enrolment earnings thresholds
- GOV.UK workplace pension minimum contributions
What the figure excludes
This is deliberately a narrow payroll benchmark. It excludes costs that differ substantially by role and employer, including:
- recruitment and onboarding
- equipment and software
- management and training
- benefits above the legal minimum
- workspace and facilities
- absence cover and overtime
- redundancy, turnover, and replacement costs
Employment Allowance or category-specific National Insurance relief may also reduce an eligible employer’s actual liability. Pension scheme rules can produce a different contribution basis. Payroll calculations should use current professional or official guidance.
How to use the benchmark responsibly
This number can help make the assumptions in a cost comparison visible. It should not be used as a direct conversion between a job and an AI system.
People and software contribute different kinds of capacity. A meaningful workflow comparison also considers judgement, accountability, service quality, error cost, review time, infrastructure, maintenance, and the new operational work created by automation.