Electrical Contractors: Where the Money Goes

There were 49,554 electrical installation businesses registered for VAT or PAYE in the UK in 2024, with a combined turnover of £34.3bn. The Office for National Statistics' Annual Business Survey shows how that turnover is spent. The biggest single cost is not wages. It is the cable, fittings, equipment and subcontract work bought in for each job.

The figures

Source: ONS Annual Business Survey, 2024 results (published 26 May 2026). It covers businesses registered for VAT or PAYE, so the smallest sole traders are not included. Averages are pulled up by the largest firms. For sole traders and partnerships, the owners’ own pay is not in staff costs: it comes out of what is left.

Out of every £100 an electrical contractor invoices, about £55 goes on bought-in goods and services and £28 on staff. That leaves about £18 to cover everything else, such as the owner's own pay in a sole trader or partnership, finance costs, tax and profit.

How it has changed since 2019

Electrical installation: turnover rose 36% between 2019 and 2024, against a 24% rise in consumer prices, so it grew in real terms. The number of businesses rose 7%. Staff costs went from 24.0% to 27.6% of turnover, and what was left after staff and bought-in costs went from 21.4% to 17.6%.

What this means for an electrical contracting business

• Materials are the biggest lever. With bought-in costs at more than half of turnover, a few per cent off the price of materials, or a few per cent less waste, is worth more than the same effort on almost any other cost.
• Recharge everything. Fixings, consumables and small parts used on a job are easy to leave off an invoice. Check a sample of recent jobs against what left the van.
• Know your real hourly cost. Staff costs have risen as a share of turnover since 2019. Price labour from the true cost of each working hour, not the hourly wage.
• Watch van stock. Stock held across vans and stores ties up cash. Fewer, better-chosen lines usually do the same job.
• Price small jobs properly. Travel and set-up make small jobs expensive. A minimum charge stops them eating the margin.

Compare your business

Enter your turnover and costs from your last full year of accounts. The calculator compares your shares with the ONS figures and shows where any gap is.

Guides that fit this trade

• Job profitability: find out which types of job actually make money.
• True cost of an employee: the real cost of each working hour, for pricing labour.
• Stock turnover and EOQ: how much van and stores stock to hold.
• Vehicle cost per mile: what each mile of travel to a job really costs.