Price a cleaning contract from the cost of an hour actually delivered: a £12.71 wage becomes about £14.24 to £16.27 in the examples below before overheads and profit. The difference depends on each employee’s hours, pension position and the Employment Allowance still available, so a single on-cost percentage cannot price every contract.
Shorthand figures of roughly 18% to 25% for employer on-costs circulate widely, and our own commercial cleaning price guide used that band until the arithmetic below corrected it. That band is both too narrow and too high at the bottom: the four cases worked here land between about 12% and 28%, and not one of them falls inside 18% to 25%. Treat any single on-cost percentage as a rough middle, not a range to quote against.
Two companion pieces cover the parts this one assumes: the true cost of a first employee works the same NIC, pension and allowance mechanics on an annual salary rather than a worked hour, and holiday pay for irregular hours covers when the 12.07% figure below may lawfully be paid as rolled-up holiday pay, which for the fixed-hours patterns here it may not. All statutory inputs were checked on 11 September 2026; assumptions and calculated amounts below are our illustrative budget, not a survey of contractors.
Pay for 52 weeks, budget against 46.4
The minimum hourly rate for workers aged 21 and over is £12.71 from 1 April 2026. Both examples use that wage, fixed regular hours, employees aged 22 to State Pension age, ordinary employer NIC and statutory minimum leave. (HMRC)
Most workers receive 5.6 weeks’ paid holiday. For these fixed-hours patterns, paying for 52 weeks gives about 46.4 working weeks, before sickness or training. (GOV.UK)
The budget calculation is 5.6 / 46.4 = 12.07%. Therefore £12.71 x 52 / 46.4 = £14.24 per worked hour, including holiday pay. This is a costing method. It is not an instruction to pay fixed-hours staff rolled-up holiday pay, or to calculate their legal leave entitlement under the separate irregular-hours regime.
If a client needs uninterrupted service, the person covering holidays also needs funding. Dividing annual employment cost by the hours each employee can actually supply gives you a way to cost that staffing pool without treating holiday weeks as productive hours.
Calculate each employee before combining the contracts
For 2026/27, ordinary employer NIC is 15% above the secondary threshold. This model uses its £5,000 annual equivalent. Actual payroll uses pay-period thresholds, including £96 weekly or £417 monthly, so payroll totals will differ slightly. (HMRC)
The pension calculation uses a minimum 3% employer contribution on qualifying earnings. The annual band is £6,240 to £50,270 and the automatic-enrolment trigger is £10,000. (The Pensions Regulator: contributions, thresholds)
| Annualised calculation | A: 10 hours a week | B: 37.5 hours a week |
|---|---|---|
| Pay: hours x 52 x £12.71 | £6,609.20 | £24,784.50 |
| Worked hours: hours x 46.4 | 464 | 1,740 |
| Employer NIC before allowance | £241.38 | £2,967.68 |
| Employer pension assumed | £0.00 | £556.34 |
| Labour per worked hour, no allowance remaining | £14.76 | £16.27 |
| Labour per worked hour, NIC fully covered by allowance | £14.24 | £14.56 |
Amounts use unrounded calculations before final rounding. Pattern A assumes no pension opt-in; Pattern B assumes enrolment and minimum qualifying-earnings contributions.
The pension assumption matters. Pattern A earns £127.10 weekly, above the £120 lower qualifying-earnings level. Although below the automatic-enrolment trigger, an eligible employee can opt in and require employer contributions: approximately £11.08 annually here, adding about 2.4p per worked hour. (GOV.UK)
At this wage, weekly NIC begins above roughly 7.55 hours. The £192 weekly pension trigger is reached at roughly 15.11 hours, subject to age and assessment rules. Assess actual pay each period, especially where overtime changes the position. (HMRC, The Pensions Regulator)
The £2 gap is conditional
Comparing A with NIC relief against B without it gives a £2.03 hourly difference. That combines staffing pattern with allowance availability. On equal terms, the gap is about £1.51 without relief, or 32p when both employees’ NIC is covered.
Eligible employers can offset up to £10,500 of employer NIC per tax year. In this model that covers 43 separate small-round employees’ NIC (£10,379.34), or 3 full-time employees (£8,903.03). A fourth full-time employee takes the total to £11,870.70, leaving £1,370.70 payable. (HMRC)
That is one allowance across the business, not one per contract. A cleaner working four rounds for you is still one employee. Check headroom after supervisors and office staff, and check eligibility: connected companies share a claim, and businesses doing half or more of their work in the public sector can be excluded. (HMRC eligibility)
Run your actual staffing mix through the employer cost calculator. For a contract that will grow the team, price the additional NIC once existing allowance is used up.
Include sickness without counting wages twice
From 6 April 2026, eligible employees receive SSP from their first full day of sickness absence without the former earnings floor. (Department for Business and Trade)
The weekly payment is the lower of £123.25 and 80% of average weekly earnings. With steady pay, A’s full-week SSP is £101.68 and B’s is £123.25. (HMRC)
Budget sickness and cover using your absence experience. The table already includes ordinary annual wages: replace the relevant wages with sick pay and add cover costs when modelling an absence. Do not add both full ordinary pay and SSP for the same time unless your contractual policy actually pays both.
Turn the labour floor into a charge-out rate
Suppose B has no allowance remaining and the job budget adds the following amounts per delivered hour. These are illustrative allowances to replace with your own supplier prices and operating records.
| Cost or pricing step | Per delivered hour |
|---|---|
| Labour floor, rounded | £16.27 |
| Materials and equipment | £0.80 |
| Supervision and quality checks | £0.70 |
| Travel and vehicle costs | £0.60 |
| Insurance, including employers’ liability, and administration | £0.40 |
| Sickness, training and other non-productive time reserve | £0.60 |
| Total budgeted cost | £19.37 |
| Price for an illustrative 20% margin: £19.37 / 0.80 | £24.21 |
The margin calculation matters: multiplying cost by 1.20 gives a 20% markup, only a 16.67% margin. State whether your quote excludes VAT, and add VAT where applicable.
Use the cleaning contract calculator to turn the hourly budget into the site’s planned visits and monthly price. Walk the site, time the tasks and include access delays before committing the hours.
For example, a site buying 10 delivered hours every week for 52 weeks would pay £1,049.10 a month at £24.21 an hour: 10 x 52 x £24.21 / 12. That promises year-round delivery, so the staffing plan must include holiday cover.
There is no universal legal minimum charge-out rate: employment law governs what you pay workers. Your commercial minimum is the cost of delivering the agreed work, including paid time away from the site. Write that cost beside the quote, then decide whether the price leaves enough profit to accept the job.
