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Calculate National Insurance and Minimum Wage Impact for Hospitality – 2026 

Plan ahead as employment costs continue to rise  

Hospitality businesses are already managing significant cost increases from the October 2024 Budget, which took effect in April 2025, and face additional wage pressures from April 2026: 

Already in effect since April 2025: 

  • Employer National Insurance rate increased from 13.8% to 15% 

  • Secondary Threshold reduced from £9,100 to £5,000 per year 

  • November 2025 Budget extends this threshold freeze until 2030/31 

Coming April 2026 – Confirmed minimum wage increases: 

  • National Living Wage (21+): rises from £12.21 to £12.71 per hour (4.1% increase) 

  • National Minimum Wage (18-20): rises from £10.00 to £10.85 per hour (8.5% increase) 

  • Ages 16-17 and apprentices: rises from £7.55 to £8.00 per hour (6% increase) 

 

For hospitality businesses employing teams across front of house, kitchen and operations, understanding the combined impact of these ongoing NI costs and upcoming wage increases is essential for effective planning. 

Get clarity on your numbers now  

Use our free calculator to see exactly how these changes affect your business, so you can make informed decisions about workforce planning.  

The Contribution Cruncher – Hospitality’s National Insurance Calculator

What this means for hospitality 

These changes recognise the need for better pay for workers, which is positive for the thousands of people who make hospitality their career. However, for operators already managing tight margins while absorbing the April 2025 NI increases, the additional April 2026 wage rises present genuine challenges. 

The sector is already feeling the impact – data shows hospitality employment fell 2.5-3% between October 2024 and October 2025, with many businesses absorbing costs through lower profit margins rather than reducing headcount. 

Some businesses may need to make difficult decisions around staffing levels, trading hours, or operational models to absorb these cumulative costs. Without additional government support to offset these increases, the sector faces tough choices about remaining viable while continuing to employ the teams that deliver great guest experiences. 

Some relief is available 

The Employment Allowance has increased from £5,000 to £10,500 from April 2025, with the £100,000 eligibility cap removed. This means 865,000 employers will pay no employer National Insurance at all, providing meaningful relief for smaller hospitality businesses. 

Planning ahead gives you options: 

  • Model different scenarios for staffing levels and wage structures 

  • Explore how smarter scheduling and workforce management can optimize labour costs 

  • Consider how technology can drive efficiency without compromising service quality 

  • Review your operational hours and trading patterns 

  • Evaluate your pricing strategy to reflect increased costs while remaining competitive 

You have time to prepare for April 2026's wage increases – understanding the numbers now means you can make strategic decisions rather than reactive ones. The sector continues to need government support to help offset these cumulative cost pressures while maintaining employment levels and service standards. 

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