Staff costs as a percentage of turnover is the share of every £1 of sales that goes on paying your people. It is one of the quickest ways to see whether your pricing, staffing and workload are in balance, and one of the few you can check against hard national data.
Across all UK non-financial businesses, staff costs were 19.0% of turnover in 2024, according to the Office for National Statistics. That average is close to useless on its own: it hides a range from under 5% for car dealers to 77% for domiciliary care. The only fair comparison is with businesses that do what you do, and the table below gives that for 27 sectors.
Works out the true cost of each employee, including employer National Insurance and pension at 2026/27 rates, then benchmarks your total against your sector.
Staff costs ÷ turnover × 100. Use the same 12 months for both, and turnover excluding VAT.
To compare with the ONS figures, count staff costs the way ONS does:
Worked example. An electrical contractor turns over £400,000. It employs four people on a combined £117,000 of gross pay. Employer National Insurance adds £2,100 after the Employment Allowance, pension adds £2,386 and other staff costs £1,000, so total staff costs are £122,486. That is 122,486 ÷ 400,000 × 100 = 30.6% of turnover. The ONS figure for electrical installation firms is 27.6%, so this business spends 3.0 percentage points more of its sales on staff than the sector as a whole. At £400,000 turnover, that gap is worth about £12,100 a year.
Staff costs = gross pay + employer National Insurance + employer pension. Sector figures: ONS Annual Business Survey, 2024. Nothing you type here leaves your browser.
Total employment costs as a share of total turnover, for every business in each sector, large and small. Sorted from highest to lowest.
| Sector | 2024 | 2023 |
|---|---|---|
| Domiciliary care | 77.0% | 73.6% |
| Commercial cleaning | 60.4% | 63.5% |
| Care homes: nursing | 57.4% | 56.0% |
| Care homes: residential | 54.8% | 55.9% |
| Veterinary practices | 41.0% | 43.0% |
| Recruitment: temporary staffing | 40.7% | 35.6% |
| Removals | 36.9% | 37.5% |
| Funeral directors | 34.5% | 28.9% |
| Restaurants and cafes | 33.7% | 32.9% |
| Warehousing and storage | 33.0% | 28.8% |
| Pubs and bars | 32.5% | 32.5% |
| Hotels and guest houses | 31.9% | 31.8% |
| Gyms and fitness | 29.6% | 26.6% |
| Landscaping | 29.0% | 25.3% |
| Holiday lets and short stays | 28.1% | 24.5% |
| Plumbing and heating | 28.0% | 24.7% |
| Recruitment: permanent placement | 28.0% | 28.2% |
| Electrical contractors | 27.6% | 23.2% |
| Road haulage | 25.4% | 26.1% |
| Printing | 24.8% | 23.4% |
| Fit-out and finishing trades | 21.2% | 18.5% |
| Garden centres, florists and pet shops | 21.0% | 20.3% |
| Vehicle repair garages | 20.6% | 17.3% |
| Manufacturing (all) | 16.7% | 16.3% |
| Building construction | 13.4% | 12.9% |
| Retail (all shops) | 12.9% | 12.3% |
| Car dealers | 4.9% | 4.7% |
| All UK non-financial businesses | 19.0% | 18.1% |
Source: ONS, UK non-financial business economy (Annual Business Survey), 2024 results, released 26 May 2026. Ratio of total employment costs to total turnover. Smaller sectors move more from year to year because they rest on fewer survey returns, so read them as a guide rather than a target.
Your own pay may be missing. If you are a sole trader or partner, what you take out of the business is drawings, not a staff cost, so your figure looks lower than it really is. The ONS data shows the effect clearly. In accommodation and food, businesses with 1–9 staff spend 27.9% of turnover on staff, against 38.3% for those with 10–49. In professional services the figures are 21.6% and 37.1%. Much of that gap is owners doing work that is not counted. For a fair comparison, add what it would cost to pay someone to do your hours.
Subcontractors and agency staff are left out. A building firm that uses labour-only subcontractors will show low staff costs because its labour sits in purchases. That is why building construction shows 13.4% while fit-out and finishing trades show 21.2%. When judging your pricing, add subcontract labour back in.
What you sell changes the maths. A car dealer's turnover includes the full price of every car, so staff costs are a small slice (4.9%). A cleaning company sells little but labour, so staff costs are most of its turnover (60.4%). Compare yourself only with businesses that have the same model.
A figure well above your sector usually points to one of four things:
A figure well below your sector is not automatically good news. It can mean a genuinely efficient operation, but it can also mean an owner working unpaid hours, heavy reliance on subcontractors, or a team stretched so thin that service and staff retention suffer. Losing people is expensive too: see the real cost of staff turnover.
The template turns a list of names and salaries into a full staff cost, then benchmarks it. It includes:
Rates are for the 2026/27 tax year and sit in their own cells, so you can update them each April. It works in Excel and Google Sheets.
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