Staff costs in 2026: the legal floor, the hidden extras and a rota that follows sales

From April 2026 the National Living Wage is £12.71, and employers pay 15% National Insurance above £5,000 a year per employee. Here is what a staff hour really costs and how to build a rota around sales, not habit.

By Eliana Conti

Customer success

Thursday, 17 September 2026 4 min read

Illustration of a wall rota of coloured blocks beside an apron hanging on a hook and a round clock

Labour is usually the biggest controllable cost in a restaurant or bar, and the one that moves most when the rules change. The useful question is not what you pay per hour but what an hour of work costs once everything is added, and whether the hours on your rota match the hours that sell.

The legal floor

The rates on GOV.UK changed on 1 April 2026:

Age	Hourly rate
21 and over (National Living Wage)	£12.71
18 to 20	£10.85
Under 18	£8.00
Apprentice	£8.00

The year before, the figures were £12.21, £10.00, and £7.55 for under-18s and apprentices. So the adult rate rose by 50p, about 4.1%, and the 18 to 20 rate by 85p, or 8.5%. A venue with a young team feels the second number more than the headline.

Apprentices get the apprentice rate only if they are under 19, or aged 19 or over and in the first year of the apprenticeship. After that, they are owed the minimum for their age.

What an hour really costs

Since April 2025, employer National Insurance is 15% (it was 13.8%), and you start paying it on earnings above £5,000 a year per employee (it was £9,100). GOV.UK’s Employer Bulletin sets out the change, and the 2026 to 2027 rates page confirms the 15% still applies, with the secondary threshold at £96 a week.

Two things soften it. The Employment Allowance lets eligible employers reduce their annual National Insurance bill by up to £10,500. And the same rates page shows no employer National Insurance on earnings up to £50,270 a year for employees under 21 and for apprentices under 25. That is worth knowing when you cost a team, though it is not a good reason to choose staff by age.

Here is an illustration, using our own arithmetic and ignoring the Employment Allowance, pensions and anything else. An adult working 25 hours a week for 52 weeks at £12.71 earns £16,523. Employer National Insurance is 15% of the amount above £5,000, which is £1,728. The year costs £18,251, or about £14.04 per contracted hour. Add pension contributions and any extra paid leave on top.

Holiday pay

Almost all workers are entitled to 5.6 weeks’ paid holiday, capped at 28 days, and employers may count bank holidays towards it. Part-timers get the same 5.6 weeks pro rata.

Casual and variable-hours staff are where rotas get complicated. For leave years starting on or after 1 April 2024, workers with irregular hours or who work part of the year accrue holiday at 12.07% of the hours they actually work. Employers may use rolled-up holiday pay for them, adding 12.07% to each payslip, but not for regular-hours workers. Which group someone falls in matters, so check before you set up payroll.

From cost to rota

A common yardstick is labour cost as a percentage of sales: total labour cost divided by net sales, excluding VAT. A rota-software vendor’s guide, Shiftbase, puts a healthy UK restaurant at 25% to 35% of revenue, depending on service style. Treat that as a rule of thumb, not an official benchmark. Your own number, tracked over time, is more useful.

The same maths gives a planning tool. Divide your fully loaded hourly cost by your target labour percentage and you get the net sales each paid hour needs to bring in. At £14.04 an hour and a 30% target, that is £46.80 of net sales per hour worked. If a Tuesday lunch is forecast at £400 and a Friday dinner at £2,600, the hours follow from the targets, not from last year’s rota.

Some practical habits:

Split fixed from flexible hours. Opening, prep and closing do not move with sales. Floor and bar hours can. Fix the first group, flex the second.
Plan by session, not by week. A strong Saturday hides a loose Monday lunch.
Forecast from your own history. Last year’s same week, adjusted for events and the weather, beats a guess.
Review after the fact. Compare hours worked with sales each week and adjust the next rota.
Watch the 18 to 20 pay band. Its rate has moved faster than the adult one, so a team mix that worked in March may not in September.

What ORDR does about this

ORDR’s reporting shows sales and items sold, so you can compare a session’s takings with the hours you staffed it. Staff take orders on phones and tablets, which means the same system feeds those reports. There is more in the help centre.

What we left out

We have not given a labour-cost benchmark from an official source because we could not find one. We have also left out the National Insurance treatment of tips and service charges, which depends on how they are paid.