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- Good for
- Running the venue
We build a useful labour budget from paid hours and responsibilities. A single percentage added to last year's total misses age-band changes, holiday cover and the shrinking reward for running a shift.
Budget 2026, paragraph 6.128, announces these hourly minimums from 1 April 2027: £13.21 for ages 21 and over, £11.27 for ages 18 to 20, and £8.31 for ages 16 to 17 and eligible apprentices. The accommodation offset becomes £11.53 per day. We treat these as announced planning inputs, with implementing regulations to check before payroll changes. The GOV.UK wage page may not show 2027 yet when consulted, although the version checked for this draft includes them.
Employer NICs are unchanged by the Budget. For the wider announcement summary, we use After the Budget: what actually changed for operators. Here we turn the wage change into a rota decision.
Freeze the hours for the first comparison
All staffing, supervisor pay and on-cost assumptions below are illustrative. Statutory wage inputs come from the official sources and the UK rules crib. We compare identical productive hours, with no overtime, bonuses or accommodation supplied. We exclude tips from minimum-wage pay.
Our weekly rota has two adult crew members working 40 hours each, another working 40 kitchen hours, two crew members aged 18 to 20 working 30 hours each, a 17-year-old working 20 preparation hours, and a supervisor working 40 hours. We schedule the young worker's preparation shifts within applicable restrictions and build breaks and rest into the actual rota. These totals are not a complete shift schedule.
| Role and age band | Weekly hours | 2026-27 wage calculation | 2027-28 wage calculation |
|---|---|---|---|
| Service crew, 21+ | 2 × 40 = 80 | 80 × £12.71 = £1,016.80 | 80 × £13.21 = £1,056.80 |
| Kitchen support, 21+ | 40 | 40 × £12.71 = £508.40 | 40 × £13.21 = £528.40 |
| Service crew, 18 to 20 | 2 × 30 = 60 | 60 × £10.85 = £651.00 | 60 × £11.27 = £676.20 |
| Preparation assistant, 17 | 20 | 20 × £8.00 = £160.00 | 20 × £8.31 = £166.20 |
| Supervisor, 21+, pay held initially | 40 | 40 × £14.21 = £568.40 | 40 × £14.21 = £568.40 |
We total the rota step by step:
- Hours: 80 + 40 + 60 + 20 + 40 = 240.
- Current wages: £1,016.80 + £508.40 + £651.00 + £160.00 + £568.40 = £2,904.60.
- Future wages: £1,056.80 + £528.40 + £676.20 + £166.20 + £568.40 = £2,996.00.
- Weekly increase: £2,996.00 minus £2,904.60 = £91.40.
There are no apprentices in this example. When we add one, we check eligibility: the apprentice minimum applies below age 19, or from age 19 during the first apprenticeship year. Older apprentices beyond that first year receive the minimum for their age. We also map birthdays, paid training and contractual increases into the relevant weeks.
Include holiday and employer costs
Almost all workers have 5.6 weeks' statutory paid holiday. For this illustration, we budget a holiday cost reserve against productive hours, assuming basic pay only. The annual relationship is 52 minus 5.6 = 46.4 working weeks; 5.6 ÷ 46.4 × 100 = 12.0689655%, rounded to 12.07%.
This is a budget provision, not a universal payroll accrual rule. We track actual leave entitlement and holiday pay separately under the official holiday guidance. We do not add the reserve again where a salary budget already includes paid leave. Any replacement cover must also be reconciled with hours already budgeted. Rolled-up holiday pay has specific eligibility rules for irregular-hours and part-year workers, set out in the reforms guidance.
For a simple illustrative on-cost, we use the rules in our UK crib. Employer NICs are 15% on each employee's earnings above the £5,000 a year secondary threshold, with an Employment Allowance of £10,500 a year for eligible employers, and the Budget left both unchanged. Because many hospitality staff work part-time and the first £5,000 of each person's pay carries no employer NIC, the effective rate across a rota is well below 15%. For example, a 40-hour adult on £13.21 earns about £27,477 a year: (£27,477 minus £5,000) × 15% = £3,372, or 12.3% of pay. A 20-hour adult earns about £13,738: (£13,738 minus £5,000) × 15% = £1,311, or 9.5%. A mixed rota of full and part-time staff lands near 10%, so we assume 10% for this illustration, before any Employment Allowance. For pensions, eligible jobholders aged 22 to State Pension age earning £10,000 or more a year must be auto-enrolled, with a minimum 3% employer contribution on qualifying earnings, the band between £6,240 and £50,270 a year. Not everyone on the rota qualifies, so 3% on the whole wage bill is a cautious allowance. Together that gives 10% + 3% = 13%. These are planning allowances, not statutory charges on every pound. Actual NIC, any allowance claimed and pension costs need employee-level calculations, so we check them with payroll. We use the same assumptions in both columns and round each money line to pennies before adding it.
| Step | Current rota | Future rota |
|---|---|---|
| Holiday reserve | £2,904.60 × 12.07% = £350.59 | £2,996.00 × 12.07% = £361.62 |
| Wages plus reserve | £2,904.60 + £350.59 = £3,255.19 | £2,996.00 + £361.62 = £3,357.62 |
| Illustrative NIC expense | £3,255.19 × 10% = £325.52 | £3,357.62 × 10% = £335.76 |
| Illustrative pension expense | £3,255.19 × 3% = £97.66 | £3,357.62 × 3% = £100.73 |
| Total weekly provision | £3,255.19 + £325.52 + £97.66 = £3,678.37 | £3,357.62 + £335.76 + £100.73 = £3,794.11 |
The weekly increase including these provisions is £3,794.11 minus £3,678.37 = £115.74. We assign it to affected weeks from April, rather than applying it to every week of calendar 2027.
Decide what supervision is worth
Our illustrative supervisor currently earns £14.21. The cash premium is £14.21 minus £12.71 = £1.50 an hour. The percentage premium is £1.50 ÷ £12.71 × 100 = 11.80%, rounded.
If pay stays at £14.21, the new gap is £14.21 minus £13.21 = £1.00. That is £1.00 ÷ £13.21 × 100 = 7.57%, rounded. The role has not become easier, but its premium has shrunk.
We have three options:
- Keep the cash gap. £13.21 + £1.50 = £14.71. Extra weekly basic pay is (£14.71 minus £14.21) × 40 = £20.00.
- Keep the percentage gap. Using the unrounded original ratio, £13.21 × (£14.21 ÷ £12.71) = £14.76900865, rounded to £14.77. Extra weekly basic pay is (£14.77 minus £14.21) × 40 = £22.40.
- Rescope the role. We review which decisions and responsibilities sit with the supervisor, who takes anything transferred and whether the arrangement works on a busy shift. We consult on contractual changes and cost any additional manager cover.
These premium options sit outside the held-pay comparison above. We rerun the holiday and on-cost rows for the option chosen. We also check neighbouring roles so a change does not create another unexplained pay gap.
