AI agent or a new hire: what each costs a UK business in 2026

An employee on a typical admin salary costs the employer about 15% more than that salary in the 2026/27 tax year, before recruitment. Employers pay 15% National Insurance on earnings above £5,000 a year and at least 3% into a workplace pension on earnings between £6,240 and £50,270, according to GOV.UK.

Admin salaries from the ONS

The ONS Annual Survey of Hours and Earnings gives median full-time pay by occupation for April 2026. These are provisional figures for employees who had been in the job for at least a year.

The employer cost of one administrator

Take an administrator paid the £29,803 median for other administrative occupations.

• Employer National Insurance is (£29,803 − £5,000) × 15% = £3,720.45.
• The minimum employer pension is (£29,803 − £6,240) × 3% = £706.89.
• The yearly employer cost is £29,803 + £3,720.45 + £706.89 = £34,230.34, which is £4,427.34 or 14.9% more than the salary.

The CIPD's Resourcing and talent planning report 2026 puts the median cost of recruiting an employee below senior manager level at £2,000, from 223 respondents who could estimate it. That takes the first year to £36,230.34.

What the totals leave out

Almost all UK workers are entitled to 5.6 weeks of paid holiday a year, or 28 days on a five-day week, and the salary already pays for it. Cover for those weeks, a laptop, software seats, training and a manager's time all come on top. Employment Allowance cuts the National Insurance line to £0 until the business has used its £10,500 for the year, so a small firm with allowance to spare pays less. A company whose only employee is its single director can't claim it.

On published prices, a custom agent costs 33% to 39% of a full-time administrator in year one and 16% to 23% in later years. The table assumes a 37.5-hour full-time week and a 20-hour part-time week, and uses the CIPD's £2,000 median for each hire.

Compare hours, not headcount

An agent takes over specific tasks, so compare it with the hours it removes. At £34,230.34 a year for 37.5 hours a week, each weekly hour of the administrator's time is worth £34,230.34 ÷ 37.5 = £912.81 a year.

• If the agent removes 10 hours a week, that work costs 10 × £912.81 = £9,128.09 a year. The agent costs more than that in year one and less from year two.
• If it removes 20 hours a week, the work costs £18,256.18 a year, and the agent pays back inside year one.
• To pay back in year one, the custom agent in the table must remove £11,888 ÷ £912.81 = 13.0 to £14,288 ÷ £912.81 = 15.7 hours a week.

The saving is real only if those hours go to other work or a planned hire doesn't happen. Count the hours for two to four weeks before you compare.

Most UK SMEs that use AI have not changed their headcount. The British Chambers of Commerce found that 95% of SMEs using AI reported no change in workforce size over the past year, and 86% said job roles stayed the same, in a survey of 668 businesses published in March 2026.

The common pattern splits the work. The agent sorts the inbox, drafts replies, chases invoices or keys documents, and a person approves what goes out and handles the exceptions. That can delay a second hire, or free an existing administrator for work the agent can't do. An AI receptionist follows the same split, taking out-of-hours and overflow calls while a person handles the front desk.