The salary on a job advert is only part of the cost of hiring an engineer in London.
Employer National Insurance and pension contributions sit on top of basic pay. For HealthTech businesses working with NHS organisations, clinical safety and data security requirements can also add work that a product team has to cover.
That makes a straight salary-versus-day-rate comparison incomplete.
A £70,000 salary costs more than £70,000
London job adverts mentioning Health Technology had a median advertised salary of £70,000 in the six months to 23 September 2026, according to IT Jobs Watch.
The figure came from 44 adverts that quoted salaries. IT Jobs Watch recorded 60 permanent London vacancies citing Health Technology during the period.
The term covers a range of roles, so the £70,000 figure is a market benchmark rather than a salary figure for one specific engineering job.
For the 2026/27 tax year, employers generally pay Class 1 National Insurance at 15% on earnings above the £5,000 annual secondary threshold. HMRC publishes the current rates and thresholds.
For an employee earning £70,000, that produces an employer National Insurance charge of £9,750 under the standard rate.
Pension contributions add another £1,320.90
Under the statutory minimum qualifying-earnings basis, an employer normally contributes at least 3% of qualifying earnings to a workplace pension for eligible staff. For 2026/27, the qualifying earnings band runs from £6,240 to £50,270. GOV.UK sets out the workplace pension rules.
For an employee earning £70,000, the qualifying earnings used for this calculation are £44,030. Three per cent is £1,320.90.
That takes a £70,000 salary to £81,070.90 after £9,750 of standard employer National Insurance and a £1,320.90 minimum employer pension contribution.
The figure does not include equipment, software, bonuses or pension contributions above the statutory minimum. Pension arrangements can also use different contribution bases, while HMRC applies different National Insurance rules to some categories of employee.
Two employees on £70,000 would cost £162,141.80 under the same assumptions. Three would cost £243,212.70, before those additional employer-specific costs.
Labour costs are already influencing hiring
The Office for National Statistics estimated 702,000 UK vacancies in the three months from June to August 2026, down 8,000 from the previous three-month period.
The ONS also said feedback from its Vacancy Survey continued to suggest that smaller businesses may not be recruiting because of increased labour costs.
LondonLovesBusiness covered the same issue in its report on how labour costs are affecting hiring decisions.
For HealthTech businesses, however, employment costs are only part of the calculation. The product can bring its own requirements.
NHS clinical safety creates work that someone has to own
NHS England sets out two national clinical risk management standards for health IT.
DCB0129 covers the manufacture of health IT systems. DCB0160 covers their deployment and use by health and care organisations. NHS England’s digital clinical safety guidance explains the distinction.
Not every digital solution requires the same level of formal clinical safety assurance. The requirements depend on the product and how people use it.
Where DCB0129 applies, manufacturers must operate a clinical risk management process, maintain clinical safety documentation and appoint a Clinical Safety Officer.
The work can include identifying hazards, maintaining clinical safety documentation and managing risk through the product lifecycle.
Someone has to own that work, regardless of whether engineers sit on the company payroll or work through an outside supplier.
NHS patient data brings another requirement
The Data Security and Protection Toolkit is an online self-assessment tool that organisations use to measure performance against the National Data Guardian’s 10 data security standards.
The toolkit states that all organisations with access to NHS patient data and systems must use it to provide assurance that they practise good data security and handle personal information correctly.
Operating in HealthTech alone does not automatically trigger the requirement. Access to NHS patient data and systems does.
Outsourcing does not remove those responsibilities
An outside engineering team changes who performs the development work. It does not automatically remove the clinical safety or data security requirements attached to the product.
NHS England says a health organisation implementing a solution can request, and should receive, the manufacturer’s DCB0129 documentation.
When evaluating healthtech software development services, a business should establish who is acting as the manufacturer for DCB0129 purposes, who owns the clinical safety documentation and which organisation is responsible for each part of the assurance process.
The business should answer those questions for the specific product and deployment rather than assume the contract structure determines them.
London contractor rates provide another benchmark
IT Jobs Watch recorded a median advertised London Software Engineer contract rate of £625 a day in the six months to 22 September 2026.
The figure came from 237 vacancies quoting daily rates, from 354 London contract jobs requiring a Software Engineer. IT Jobs Watch publishes the contractor data here.
At £625 a day, 100 days cost £62,500. At 130 days, the figure is £81,250. At 200 days, it reaches £125,000.
The 130-day figure sits close to the £81,070.90 calculated for a £70,000 employee under the assumptions above.
But the figures describe different things.
The £625 figure is a median advertised rate for individual Software Engineer contracts. It is not an average price for an outsourced HealthTech development team.
A supplier may also price an outsourced agreement by time, project, team or another commercial structure.
What the numbers show
The published data does not prove that hiring is cheaper than outsourcing, or that outsourcing is cheaper than hiring.
A £70,000 salary produces £9,750 in standard employer National Insurance under the 2026/27 rates. Under the statutory minimum qualifying-earnings pension basis, the employer contribution adds £1,320.90, taking the calculated total to £81,070.90 before other employer-specific costs.
The median advertised London Software Engineer contract rate was £625 a day in the six months to 22 September 2026.
For products entering NHS environments, clinical safety and data security requirements can also apply regardless of whether an internal or external team carries out the engineering work.
The useful comparison is therefore wider than salary against day rate. Businesses need to compare the cost of the engineering capacity they require while accounting for the requirements attached to the product.
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