Every April, the National Living Wage rises and cleaning business owners absorb the cost — often without formally reviewing their pricing. This year's increase is 4.1% for workers aged 21 and over — and with employer National Insurance at 15% and the secondary threshold sitting at just £5,000 per employee per year, the true cost to your business runs well ahead of the headline wage figure.
This article gives you the precise numbers, a worked example for common staffing configurations, and a framework for deciding whether and how to pass costs through to clients.
The new rates from April 2026
The following rates took effect from 6 April 2026:
| Age group | Previous rate (2025–26) | New rate (2026–27) | Increase |
|---|---|---|---|
| 21 and over (NLW) | £12.21/hr | £12.71/hr | +4.1% |
| 18–20 | £10.00/hr | £10.85/hr | +8.5% |
| Under 18 | £7.55/hr | £8.00/hr | +6.0% |
| Apprentice | £7.55/hr | £8.00/hr | +6.0% |
The most significant change for cleaning businesses employing adults is the 4.1% increase to £12.71. The National Living Wage applies to all workers aged 21 and over — the age threshold was lowered from 23 to 21 in April 2024, so that change is already bedded in.
The 8.5% rise for 18–20-year-olds continues the deliberate policy of narrowing the gap between youth and adult rates. If you employ younger workers, the impact on your payroll is proportionally larger than the headline figure suggests.
Calculating the real impact on a cleaning business
Abstract percentages are less useful than concrete numbers for your specific situation. Here is a worked example for a cleaning business employing two cleaners at 30 hours per week each:
Previous weekly wage bill (2025–26 rate, two cleaners at 30 hrs):
2 × 30 × £12.21 = £732.60/week
New weekly wage bill (2026–27 rate):
2 × 30 × £12.71 = £762.60/week
Additional weekly wage cost: £30.00
Additional annual wage cost: £1,560.00
That is before employer National Insurance, which we address in the next section. The table below shows the picture across common staffing configurations:
| Staffing | 2025–26 annual wage cost | 2026–27 annual wage cost | Annual increase |
|---|---|---|---|
| 1 cleaner, 20 hrs/wk | £12,698.40 | £13,218.40 | +£520.00 |
| 1 cleaner, 40 hrs/wk | £25,396.80 | £26,436.80 | +£1,040.00 |
| 2 cleaners, 30 hrs/wk each | £38,095.20 | £39,655.20 | +£1,560.00 |
| 3 cleaners, 25 hrs/wk each | £47,619.00 | £49,569.00 | +£1,950.00 |
These figures are gross wage costs only — before employer NI, pension contributions, holiday pay and any employment costs.
Don't forget employer National Insurance
Employer National Insurance is charged at 15% on earnings above the secondary threshold, which is £5,000 per employee per year (£96/week) for 2026–27. This rate and threshold were introduced in April 2025 and remain unchanged for 2026–27. When wages rise, the NI-liable amount increases, so your employer NI bill rises in proportion.
Using the same two-cleaner, 30-hours-per-week example:
Each cleaner earns: 30 hrs × 52 weeks × £12.71 = £19,827.60/year
Each cleaner's NI-liable earnings: £19,827.60 − £5,000 = £14,827.60
Employer NI per cleaner: £14,827.60 × 15% = £2,224.14/year
For two cleaners: £4,448.28/year in employer NI alone
Compare to the previous year (2025–26, £12.21/hr):
Each cleaner earned: 30 × 52 × £12.21 = £19,047.60/year
NI-liable: £19,047.60 − £5,000 = £14,047.60
Employer NI per cleaner: £14,047.60 × 15% = £2,107.14/year
For two cleaners: £4,214.28/year
Additional employer NI from the wage rise alone: £234.00/year for two cleaners.
Add that to the £1,560.00 increase in gross wages and the total additional cost of employing two cleaners in 2026–27 compared to 2025–26 is approximately £1,794.00 per year — before holiday pay on the higher wage rate, which adds a further increment.
Should you raise your prices?
In most cases, yes. Labour is your largest cost and the NLW increase is a direct and unavoidable increase in that cost. The question is how to handle it with existing clients.
Consider the margin arithmetic. If you charge £18/hr for domestic cleaning and employ one cleaner at NLW, your gross labour cost alone is now £12.71/hr — that's before employer NI at 15% (roughly £1.20/hr on top), holiday pay accrual (roughly £1.25/hr at 28 days statutory entitlement), insurance, materials, mileage, admin, and software. Your fully-loaded cost per hour of labour delivered is likely £16–£17 or more. Against an £18/hr charge rate, that leaves almost nothing.
Most clients understand that costs go up. The challenge is the conversation. A few practical principles:
- Give notice. Tell clients in writing at least four weeks before any price change takes effect. A brief email explaining the NLW increase and how it affects your costs is honest and professional. Most clients receive similar notifications from every service business they use.
- Be specific. "The National Living Wage increased by 4.1% in April, which increases my staffing costs by approximately £X per week. I'm increasing my rate from £Y to £Z from [date]" is more credible than vague references to costs going up.
- Accept that some clients will leave. Clients who leave because of a legitimate cost-reflective increase were not viable clients at the old rate either. Retaining them at a loss is not a sound business strategy.
- Commercial clients expect it. Most commercial contracts either have annual review clauses or clients who understand that NLW increases are passed through. If your commercial contracts don't have this provision, it's worth addressing at next renewal.
What's next for the NLW
The Low Pay Commission, which recommends NLW increases to the government, has been tasked with targeting the NLW at two-thirds of median earnings. With median hourly pay estimated around £19.00 in 2026, two-thirds sits at approximately £12.67 — the £12.71 NLW is now marginally above that benchmark, suggesting the pace of increases may moderate in coming years.
However, the government's target is a living standard target, not a fixed figure. As median wages grow, two-thirds of median grows with them. The NLW is expected to continue rising in real terms in coming years, though the pace of increase may moderate now that the initial catch-up phase is largely complete.
Budget for further increases regardless. The NLW has risen from £7.50 in 2017 to £12.71 in 2026 — a 69% increase in nine years. Cleaning businesses that have not passed through proportional price increases during that period have seen their margins eroded significantly. Set prices now that can absorb a further 3–4% annual NLW increase without requiring emergency client conversations each April.