A full benefits stack costs roughly: group PMI at an average ~£57 per employee per month, group income protection around 0.25–1% of payroll (~0.5% typical), group life around 0.2–0.5% of payroll (~0.3% typical), plus a cash plan (£5–£15/head/month) and EAP (£5–£15/head/year). For a 10-person firm on a £350,000 payroll, that's in the region of £11,000 a year all in.
- ✓Full stack, 10-person firm (£350k payroll): roughly £11,000 a year — about £92 per employee per month.
- ✓PMI is the dominant line at ~£57/head/month; GIP and group life together add well under 1% of payroll.
- ✓Buy in sequence — PMI, then life, then GIP — rather than all at once; each layer stands alone.
The five layers and what each costs
A complete small-company benefits stack has five layers, and they price in completely different units — per head, percentage of payroll, per year — which is why totals are hard to find. Here they are on one table, using the going rates for a typical office-based team:
| Layer | What it does | Typical pricing |
|---|---|---|
| Group PMI | Funds private diagnosis & treatment | £35–£110/head/month, avg ~£57 |
| Group income protection | Pays 50–75% of salary in long-term absence | 0.25–1% of payroll (~0.5% typical) |
| Group life (death in service) | Lump sum of 2–4x salary on death | 0.2–0.5% of payroll (~0.3% typical) |
| Health cash plan | Everyday dental, optical, physio money | £5–£15/head/month |
| EAP | Confidential counselling & helplines | £5–£15/head/year (often bundled free) |
Two structural points before the worked examples. First, PMI dominates the budget — it's usually 60–70% of the total stack cost, because it's the layer that actually funds hospital treatment. Second, the group risk layers (GIP and life) are startlingly cheap relative to what they do, because most employees never claim: together they typically add less than 1% of payroll.
Worked example: a 10-person company
Take a 10-person firm with a £350,000 payroll (average salary £35,000), office-based, mixed ages. At typical mid-range rates:
| Layer | Basis | Annual cost |
|---|---|---|
| Group PMI | 10 × ~£57/month | £6,840 |
| Group income protection | ~0.5% × £350,000 | £1,750 |
| Group life (4x salary) | ~0.3% × £350,000 | £1,050 |
| Cash plan | 10 × £10/month | £1,200 |
| EAP | 10 × £10/year | £100 |
| Total | ≈ £92/employee/month | ≈ £10,940 |
Call it £11,000 a year, or around £92 per employee per month — roughly 3% of payroll for the complete set. Against the context that UK absence costs employers around £103bn a year and each employee averages 9.4 sick days, that's the full crisis-to-check-up range covered for about the cost of a 3% pay rise — with none of it consolidated into pensionable salary.
Worked example: a 50-person company
Scale changes the rates, mostly in your favour. A 50-person firm with a £1.75m payroll gets group PMI discounts (larger groups typically price 10–30% below equivalent individual cover, and better than small groups too), and at this size the scheme likely moves to medical history disregarded (MHD) underwriting — pre-existing conditions covered, which materially upgrades the benefit.
| Layer | Basis | Annual cost |
|---|---|---|
| Group PMI (MHD) | 50 × ~£50/month (scale discount) | £30,000 |
| Group income protection | ~0.5% × £1.75m | £8,750 |
| Group life (4x salary) | ~0.3% × £1.75m | £5,250 |
| Cash plan | 50 × £10/month | £6,000 |
| EAP | 50 × £10/year | £500 |
| Total | ≈ £84/employee/month | ≈ £50,500 |
Around £50,000 a year, or 2.9% of payroll — the per-head cost falls even as the cover improves. These are indicative mid-range figures: an older workforce, richer outpatient cover, London hospital lists or cover to retirement age on GIP push totals up; leaner designs — a six-week wait option, a £250 excess, limited-term GIP — pull them down by 10–25% without gutting the substance. At 50 heads you also gain negotiating room: insurers compete harder for schemes this size, and a broker-run market review at each renewal typically claws back some of any premium drift.
Price your whole stack in one go
Don't forget the tax lines
The stack's tax treatment splits cleanly down the middle. PMI and the cash plan are benefits in kind: employees pay income tax on the premium value (P11D now, payrolled from April 2027) and the company pays Class 1A NIC at 15% — on the 10-person example, about £1,206 of NIC on the £8,040 of BIK-able premiums. GIP, group life and the EAP are generally not BIK, so they carry no employee tax and no Class 1A charge while premiums are simply being paid.
On the company side, all five layers are generally allowable business expenses for corporation tax, which takes a meaningful slice off the net cost. Add the Class 1A line to your budget, take the corporation tax relief off it, and the 10-person stack nets out at roughly £9,500 a year for a profitable company. As always with tax: generally, typically — confirm your specifics with your accountant via our tax deductibility guide.
Sequencing: what to buy first when you can't buy it all
Almost nobody buys all five layers in one go, and you don't need to — each stands alone. The sequence that fits most small companies:
- PMI first. It's the most-valued voluntary benefit, the recruitment line that moves candidates, and the layer that shortens real absences against a 12.4-week NHS median wait.
- Group life second. Enormous cover per pound (~0.3% of payroll for 4x salary), no BIK, and the simplest scheme to run.
- GIP third. The deep-risk layer for long-term absence — see our PMI vs group income protection guide for the head-to-head logic.
- Cash plan and EAP last — or first if budget is tiny: £15/head/month buys both and delivers everyday felt value while you save for the bigger layers.
The whole stack rarely needs building in one budget year. Start with the layer that solves your most pressing problem, get the design right, and add the next at renewal. We price all five together — company health insurance, group risk and cash plans — so the comparison happens once, not five times.
Frequently asked questions
How much does a full employee benefits stack cost per employee?
Roughly £85–£95 per employee per month for the complete set — group PMI (~£57), income protection and life cover (together under 1% of payroll), a cash plan (~£10) and an EAP (~£1/month equivalent). That's typically around 3% of payroll for an office-based team.
What does the full benefits stack cost a 10-person company?
Around £11,000 a year at typical rates: roughly £6,840 for group PMI, £1,750 for income protection and £1,050 for group life on a £350,000 payroll, plus about £1,300 for a cash plan and EAP. Corporation tax relief takes the net cost lower.
What does a full benefits package cost for 50 employees?
In the region of £50,000 a year on a £1.75m payroll — PMI around £30,000 with scale discounts, GIP roughly £8,750, group life £5,250, cash plan £6,000 and EAP £500. Per-head cost usually falls with size while underwriting improves to medical history disregarded.
Which benefit takes the biggest share of the stack budget?
PMI, by a distance — typically 60–70% of total stack cost at ~£57 average per head per month, because it funds actual hospital treatment. Group income protection and life cover together usually add less than 1% of payroll; cash plans and EAPs are rounding lines by comparison.
In what order should a company buy PMI, income protection and life cover?
The common sequence: PMI first (most-valued benefit, shortens real absences), group life second (huge cover per pound, no BIK), income protection third (deep long-absence protection), then cash plan and EAP. Tiny budgets sometimes invert it — £15 a head buys a cash plan and EAP today.
What percentage of payroll should a benefits stack cost?
A complete five-layer stack typically lands around 2.5–3.5% of payroll for office-based teams: PMI is the flexible line, GIP runs 0.25–1% of payroll, group life 0.2–0.5%, and cash plan plus EAP add a fraction more. Older or higher-risk workforces sit above that range.
Which parts of the benefits stack are taxable benefits in kind?
PMI and cash plans are BIK — employees taxed on the premium, company pays Class 1A NIC at 15%. Group income protection, group life and EAPs generally aren't BIK while premiums are paid (GIP payouts are taxed via PAYE when claimed). All five are generally corporation-tax deductible; confirm with your accountant.
Does the full benefits stack get cheaper per head as headcount grows?
Generally yes. Group PMI prices 10–30% below equivalent individual cover and improves further with scale, group risk rates benefit from pooling, and larger schemes unlock medical-history-disregarded underwriting — better cover at a lower per-head rate. The 50-person example prices below the 10-person one per employee.
Is a full benefits stack worth it compared with a pay rise?
At ~3% of payroll, the stack costs about the same as a 3% rise — but it isn't consolidated into future salary, part of it is corporation-tax efficient, and it buys outcomes cash can't: private treatment weeks after diagnosis, salary continuation in long-term illness, and a lump sum for a bereaved family.
Can a small company build the benefits stack gradually?
Yes — that's the norm. Each layer is a standalone contract with its own renewal, so most firms add one layer a year: PMI in year one, group life in year two, GIP in year three, cash plan and EAP whenever budget allows. No layer requires any other to exist first.