Hospitality Labour Costs in the UK
From 1 April 2026 the National Living Wage is £12.71 an hour for workers aged 21 and over, £10.85 for 18 to 20 year olds, and £8.00 for under-18s and eligible apprentices. There’s no tip credit in the UK, so tips can’t count toward the minimum: your floor is the full hourly rate before any service charge gets distributed. Rates are uprated every 1 April.
Figures verified July 2026
Statutory rates
| Rate | Per hour | Source |
|---|---|---|
| National Living Wage (21 and over)1 | £12.71/hr | GOV.UKRates from 1 April 2026 |
| National Minimum Wage (18 to 20) | £10.85/hr | GOV.UKRates from 1 April 2026 |
| National Minimum Wage (under 18) | £8.00/hr | GOV.UKRates from 1 April 2026 |
| Apprentice rate2 | £8.00/hr | GOV.UKRates from 1 April 2026 |
1 Rates change on 1 April each year.
2 For apprentices under 19, or 19+ in the first year. After that the rate for their age applies.
Next scheduled change: 1 April 2027. UK rates are uprated every 1 April.
On role-level pay data
We haven’t published median pay by hospitality role for the UK, because we haven’t found an official source we’d be comfortable citing. Reproducing a figure from a job board as though it were a statistic isn’t worth the doubt it casts on everything else here, so this page sticks to the statutory rates above, which are published by government and easy to check.
From an hourly rate to a labour cost percentage
The rates above are what you may not pay below. What an hour costs you is larger, once the on-costs below are added, and the labour cost percentage calculator will turn the two halves into a figure you can compare. The prime cost calculator then tells you whether that number and your food cost together leave room for rent and profit.
Tips and tip handling
There is no tip credit in the UK. Tips, gratuities and service charges can’t be used to make up the National Minimum Wage, so every worked hour has to be paid at or above the statutory rate on its own. How tips are then shared between staff is governed separately, and the rules have changed in recent years, so check the current position rather than assuming it works the way it used to.
If you need to write this down for your team, the tip-out policy generator produces a plain-language policy document, and the tip-out calculator handles the nightly split.
What else drives your labour cost here
Employer National Insurance
Your wage bill isn’t your labour cost. Employer NI sits on top of every hour, and it scales with the floor, so a rise in the National Living Wage raises your on-cost as well as your gross pay. Model both together or the April increase will be bigger than you planned for.
Holiday pay
Statutory paid leave comes out of the same revenue as worked hours. For a business running mostly part-time and variable shifts this is a meaningful slice of true hourly cost, and it’s routinely under-budgeted.
Pension auto-enrolment
Employer contributions for eligible staff are another layer over the headline rate, and like NI the cash amount climbs automatically when the floor does.
Your age mix matters less than it used to
The gap between the 21-and-over rate and the 18-to-20 rate narrowed sharply in April 2026, when the younger band rose 8.5% against 4.1% for the main rate. If your staffing model leaned on under-21s to hold costs down, there’s less room in it now. UKHospitality put the sector-wide cost of the April 2026 changes at around £1.4bn.
For what your percentage should be measured against, see the cost benchmarks by type of food business.
Run your own numbers
Frequently asked questions
What is the UK minimum wage for hospitality staff in 2026?
There’s no separate hospitality rate. From 1 April 2026 the National Living Wage is £12.71 an hour for workers 21 and over, £10.85 for 18 to 20 year olds, and £8.00 for under-18s and eligible apprentices.
Can I count tips toward the minimum wage in the UK?
No. Tips, gratuities and service charges can’t count toward the National Minimum Wage or National Living Wage. Every worked hour must be paid at or above the statutory rate before tips are distributed.
When does the UK minimum wage change?
Once a year, taking effect on 1 April. The next change is due 1 April 2027.
What should my labour cost percentage be as a UK restaurant?
There’s no UK-specific benchmark we’d stand behind. The National Restaurant Association’s US figures, a 36.5% median for full-service and 31.7% for limited-service, give you a shape to aim at, though UK wage floors, NI and tipping practice all differ enough that the level will not transfer. Track your own trend.
How do I calculate my labour cost percentage?
Divide total labour cost for a period, meaning gross wages plus employer NI, pension and holiday pay, by total sales for the same period, then multiply by 100. Including the on-costs is what separates a real number from a flattering one.
Labour costs elsewhere
- Hospitality Labour Costs in IrelandNational Minimum Wage from January 2026, the age bands, and the move toward a living wage.
- Restaurant Labor Costs in the United StatesFederal floor, the tip credit, BLS median pay by role, and the national benchmarks.
Rates on this page are reproduced from the government sources listed below and were last checked on 20 July 2026. They are published for orientation and are not legal advice — before you set pay, confirm the current figure against the primary source for your jurisdiction, including any local ordinance that may exceed it. The headline rate at time of writing was £12.71 per hour.
Sources
- GOV.UK — National Minimum Wage and National Living Wage ratesRates from 1 April 2026 · Government / statistical