The April cost stack: what 2026/27 actually adds to your wage bill

Every April, the cost of employing your team goes up by an amount you did not choose, on a date you did not pick, regardless of how the year went. This is worth understanding precisely rather than approximately, because "wages went up again" is a feeling, and a feeling cannot be planned around.

Here is what the 2026/27 year actually does to a practice payroll.

The two numbers that drive it

The National Living Wage is £12.71 an hour from 1 April 2026 for workers aged 21 and over — a rise of 50p on the previous year.

Employer National Insurance is 15% on earnings above £5,000 a year per employee. That threshold is the part people underestimate. It is not £12,570 and it never was: the employer's threshold is separate from and far below the employee's, so employer NI starts biting at around £96 a week. A part-timer doing two days a week is generating employer NI from close to their first hour.

Two consequences follow, and they compound:

1. Every pay rise costs you the rise plus 15% of it, before you count pension.
2. The low threshold means part-time and junior roles — traditionally the flexible, affordable part of a rota — carry proportionally more employer NI than they used to.

Worked through, for a real rota

Take a practice with four people on or near the National Living Wage: two full-time at 37.5 hours and two part-time at 20 hours.

At £12.71 an hour, the two full-timers cost about £24,784 each a year in gross pay, and the part-timers about £13,218 each. Gross payroll for those four is roughly £76,000.

Employer NI is 15% of everything above £5,000 per person. That is £19,784 of NI-able pay for each full-timer and £8,218 for each part-timer — around £56,000 in total across the four, so about £8,400 in employer NI.

Now add the 50p-an-hour uplift itself. Across those four people that is roughly £2,990 of extra gross pay compared with the previous rate — and because employer NI applies to it too, the real cost is closer to £3,439.

So before pension contributions, before any rise for staff above the minimum, and before a single supplier price moves, that practice is roughly three and a half thousand pounds worse off than the year before. On a four-person rota.

Two things follow from that arithmetic. First, differentials: if your senior nurse was on £14 and the floor rises to £12.71, the gap that used to reward five years of experience is now 10%, and she has noticed. Holding differentials means the real payroll increase is larger than the minimum-wage line implies. Second, the cost of hiring the marginal part-timer is higher than it looks, which is precisely the calculation that quietly stops practices from adding capacity.

The relief a lot of small practices miss

Employment Allowance is £10,500 for 2026/27. It is a reduction in your employer NI bill — not a rebate, not a grant. If your employer NI for the year comes to £8,400, Employment Allowance can wipe it out entirely.

It is not automatic. You claim it through your payroll software, and it is one of the most commonly missed reliefs in small businesses.

The catch that catches practice owners specifically: you cannot claim it if the only person on the payroll is a single director. This is the classic one-person limited company situation. If that is you and you employ nobody else, the allowance is not available. Add a second employee earning above the secondary threshold and the position changes — but do not create a job that does not exist to chase a relief. Talk to your accountant about your actual structure.

Also worth knowing: if you run more than one company, the allowance is available to the group once, not once per company.

Where this lands

Put the pieces together and the shape of the year is clear. Your wage bill rises on 1 April by a percentage set nationally. Your energy, insurance, indemnity, waste and software contracts each renew on their own anniversary, most with an uplift. Your fees rise when you decide to raise them, which is a decision you will put off, because your patients are living through the same squeeze and you are not keen to be the expensive one in town.

Costs rise on a timetable. Prices rise on a conversation. That asymmetry is the whole of the problem.

Which leaves three levers, and only three:

• Charge more. Real, but limited, and it costs you something with patients. Worth doing deliberately rather than in a panic — see pricing without losing patients.
• Do more with the same team. Genuine, but it is a year of work, not a quarter, and it usually needs investment first.
• Pay less for what you already buy. The fastest of the three, and the only one that is invisible to your patients.

That third lever is the one that scales without asking anything of anyone. It is also the one where an independent practice is structurally worst placed, because you buy at the volume of one practice and have no idea what anyone else pays.

That is the specific problem we exist to solve: we negotiate supplier rates on behalf of many independent practices at once, so you get the pricing of a group while staying entirely your own. Membership is free — suppliers pay us, never you. Start where the money usually is: have your card-processing rate reviewed.