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True labour cost calculator

Model the team the way it actually is: groups of people on different rates and hours. Then add employer National Insurance with the Employment Allowance, the auto-enrolment pension, holiday accrual and absence cover, and measure the whole thing against sales.

Your team

16 people · 352 hours a week
£
£133,698
£
£117,284
£
£21,322
On-costsNI, pension, holiday, cover

Qualifying earnings is the band between £6,240 and £50,270. A certified scheme uses total pay at a higher rate.

% of wages

The hours someone else works to cover an absence. 2% is a common planning figure.

Sales and trading hourslabour percentage, cost per hour open
£

Ex VAT. Set to 0 to hide the labour percentage.

%

Hospitality usually aims at 28% to 32% of net sales.

hrs

True labour cost

16 people

A year

£296,047

£243,377 of wages plus 21.6% of on-costs

A month

£24,671

Everything included

A week

£5,693

£16.17 per staff hour

  • Wages 82%
  • Employer NI 5%
  • Pension 1%
  • Holiday 10%
  • Cover 2%
Gross wages
£243,377
Employer National InsuranceAfter £10,500 of Employment Allowance
£14,007
Auto-enrolment pension
£4,420
Holiday pay
£29,376
Cover for absence
£4,868
Total cost of employing this team
£296,047

Labour as a share of sales

Target 30%

Labour percentage

31.6%

£5,693 of labour on £18,000 of sales

Sales needed for target

£18,977

£977 a week more than now

Cost per hour open

£67.78

Across 84 trading hours

The Employment Allowance wipes out £10,500 of employer National Insurance. Most businesses can claim it, but not a single-director company with no other employee above the threshold.
The allowance is used up. Every further hour on the rota now carries the full 15% employer National Insurance.
Weekend / casual earn under the £10,000 auto-enrolment trigger, so no employer pension is assumed. They can still ask to opt in, and then you must contribute.
Holiday pay is added at 12.07% because the hours above are hours actually worked. If you budgeted contracted hours that already include paid leave, turn this off so you do not count it twice.
Labour is running at 31.6% of sales against a 30% target. Closing that gap needs either £977 more sales a week or 293 pounds less labour.
See this number move in real time, shift by shift

Live labour cost against sales, updating as people clock in.

Indicative estimate at 2026-27 thresholds. Employer National Insurance is 15% of pay above £5,000 a year per employee; the Employment Allowance offsets up to £10,500 of it for eligible employers. Pension uses the 3% auto-enrolment minimum on qualifying earnings (£6,240 to £50,270) for people over the £10,000 trigger. Real figures vary with reliefs, salary sacrifice, scheme basis and individual pay. Not tax advice.

Do it once here, or never again

A model is a guess. This is the same number, live

The figure above is what the team should cost. WagePilot shows what it is costing, as people clock in, against the sales that are actually happening.

Cost while you can still change it

The live board shows what the floor is costing right now and as a share of the day, so an overstaffed Tuesday is a decision rather than a discovery.

Budget against the rota, not after it

Set a labour target per site and the rota builder shows the projected cost against it as you drag shifts around.

Live

Labour percentage that updates itself

Sales and hours meet in one place, so the percentage is current at four o’clock on a Saturday, not a fortnight later.

Site by site, on one screen

Four venues, four labour percentages, one view, and one flat charge a site rather than a bill that grows with every hire.

See labour cost live See the live demo, no sign-up

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The arithmetic

The gap between the wage bill and the labour cost

For most shift businesses it is 20% or more, and every part of it is predictable.

Employer National Insurance

Employers pay 15% on everything an employee earns above the annual secondary threshold of £5,000. There is no upper limit. On a full-timer earning £29,000 that is about £3,600 a year on its own.

Most employers can then offset up to £10,500 of that bill with the Employment Allowance. It is a genuine saving and it is also a cliff: once it is used up, every further hour on the rota carries the full rate. Businesses that grow through the allowance mid-year often find their labour cost accelerating for no visible reason.

The auto-enrolment pension

The employer minimum is 3%, and the base it applies to matters more than the rate. The statutory basis is qualifying earnings: the band between £ 6,240 and £ 50,270, not total pay. Someone on £20,280 costs 3% of £14,040, not 3% of £20,280.

Nobody earning under the £10,000 trigger has to be enrolled at all, which is why a team of part-timers carries a very different pension cost to the same wage bill concentrated in fewer people. They can still ask to opt in, and then you must contribute.

Holiday, if you budgeted worked hours

This one depends entirely on what your hours figure means. If you budgeted contracted hours, paid leave is already inside them and adding 12.07% double counts. If you budgeted hours actually on the floor, which is how most rota-driven businesses think, then holiday pay is a real additional cost of roughly 12.07% of wages.

Cover for absence

When somebody calls in sick, the shift still has to be worked. Statutory Sick Pay is the smaller half of that cost; the larger half is the person who covers, often at short notice and sometimes at a premium. Two per cent of the wage bill is a common planning figure, and it is the line most budgets leave out entirely.

Labour as a share of sales

An absolute cost tells you very little. Labour percentage tells you whether the cost is earning its place. Hospitality usually aims at 28% to 32% of net sales, with prime cost under 60% to 65%. The tool works backwards too: given your labour cost and your target, it shows the weekly sales you would need, which is often a more useful conversation than cutting hours.

Common traps

What employers get wrong

None of these are careless. Every one of them is a reasonable assumption that happens to be untrue.

  • Budgeting the wage bill and calling it the labour cost.

    National Insurance, pension, holiday and cover typically add 20% or more. The wage bill is the smaller half of the decision.

  • Modelling the whole team as one average person.

    Thresholds do not average. Twelve part-timers under the pension trigger and four full-timers over it behave nothing like sixteen people on the mean.

  • Forgetting the Employment Allowance runs out.

    It offsets the first £10,500 of employer NI. After that every extra hour carries the full 15%, which is exactly when a rota is growing.

  • Applying the pension to total pay by default.

    The statutory basis is qualifying earnings, the band between £6,240 and £50,270. Using total pay overstates the cost unless you run a certified scheme.

  • Adding 12.07% holiday to contracted hours.

    Contracted hours usually already include paid leave. Add holiday only when you have budgeted hours actually worked, or you count it twice.

  • Checking the labour percentage at month end.

    By then the overspend has happened. The only useful moment to see it is while the shift is still running.

Labour cost questions

How do I calculate my weekly wage bill?
Multiply headcount by hourly rate by hours a week, for each group of staff separately. Modelling a mixed team as one average person hides the thresholds that matter: employer National Insurance, the auto-enrolment trigger and the qualifying earnings band all bite at different pay levels.
What are employer on-costs, and how much are they?
Employer National Insurance at 15% on pay above the £5,000 annual secondary threshold, plus the auto-enrolment pension minimum of 3% on qualifying earnings between £6,240 and £50,270 for anyone earning over £10,000. Together they usually add 10% to 15% to a full-timer’s pay, before holiday and absence cover.
What is the Employment Allowance?
It lets most employers offset up to £10,500 of their employer National Insurance bill each year. Once it is used up, every further hour on the rota carries the full 15%. A single-director company with no other employee earning above the secondary threshold cannot claim it.
Should I add holiday pay to my labour cost?
Only if the hours you have budgeted are hours actually worked. If you have modelled contracted hours that already include paid leave, adding 12.07% counts it twice. If you have modelled hours on the floor, holiday pay is a genuine extra cost.
What is a healthy labour cost percentage?
It varies by trade. Hospitality usually targets 28% to 32% of net sales, with prime cost, labour plus cost of goods, under about 60% to 65%. Retail and services differ. The habit that matters is watching labour as a live percentage of sales rather than a number that arrives at month end.
How do I bring the wage bill down without cutting hours blindly?
The cheapest savings are in matching staffing to demand and closing small leaks: overstaffed quiet shifts, early clock-ins, unapproved overtime, and hours that get rounded up when they are copied by hand. All of them are invisible until the cost is shown while the shift is still running.

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Watch your wage bill live

See what every shift is costing while it is still running, not weeks later on a payslip. From £29 a month per site, never per head.

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From £29/mo · never per head

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