Labour Costs

For many companies across the UK, staffing costs are their single largest category of expenditure. In addition to paying staff salaries, employers are also required to pay National Insurance contributions and to contribute to workplace pensions.

Edinburgh salaries will vary considerably depending on the role, skills and experience you are recruiting for.

Salaries

Earnings in Edinburgh and the city region are higher than the Scottish average, but lower than the UK average. 

The UK labour market is extremely flexible in comparison to continental Europe.

The annual salary of a software development engineer in Edinburgh is around 13% lower than a similar role in Cambridge and, allowing for exchange rates, 33% lower than that of the equivalent role in San Francisco.  

In 2016, the average annual salary of a full-time worker in Edinburgh was £29,500 per annum. However, salaries will vary considerably depending on the role, skills and experience you are recruiting for. 

National minimum wage and National living wage

Employers are required to pay their workers at least the National Minimum Wage, or, in the case of workers aged 25 or above, the National Living Wage

National Insurance (NI)

You are required to pay National Insurance for each of your employees. Payments will depend on how much they earn, their personal circumstances and what sort of workplace pension scheme you operate.

For most employees, you will need to pay National Insurance equivalent to 13.8% of their pay, although in some cases you will have to pay less or may be entitled to a small rebate. You must also withhold National Insurance contributions from your employees’ pay and pay this to HM Revenue and Customs on behalf of your employees.

Workplace pension

All employers in the UK are required to provide a workplace pension for any employee aged between 22 and the State Pension Age, who earns at least £10,000 a year and works in the UK. Employers are required to pay a minimum percentage of each employee’s salary into the workplace pension each year.

You must also withhold contributions from your employees’ pay and pay these into the workplace pension on behalf of the employees.

Staff entitlements

Most employees have a legal right to a certain amount of paid holiday every year. Employees are also entitled to receive pay while sick or on maternity or paternity leave. 

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Investor Support Team

City of Edinburgh Council

E: invest@edinburgh.gov.uk

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