Free Labour Rate Calculator
Calculate the true cost of employing an electrician, including NI, pension, holidays, and overheads. Essential for setting charge-out rates.
Labour Rate Calculator results
Fill in the details and select Calculate to see your figures.
This labour rate calculator shows electrician employers the true cost of an employee, including National Insurance, pension contributions, holiday pay, and workplace overheads. Knowing your true cost per hour is essential for setting profitable charge-out rates and quoting accurately.
How to use the Labour Rate Calculator
- Enter the employee's gross annual salary.
- Check the employer NI rate: currently 15% above the £5,000 secondary threshold (unchanged from 2025/26 into 2026/27).
- Enter your employer pension contribution (minimum 3% under auto-enrolment).
- Set the number of holiday days including bank holidays (statutory minimum is 28).
- Add other per-employee costs like training, PPE, tools, and phone.
- Review the true hourly cost. Your charge-out rate should be at least 2-3x this figure to cover overheads and profit.
How the Labour Rate Calculator works
An employee's true cost is far more than their salary, and it is spread over fewer hours than you think. You recover the full employment cost only across the hours that are actually billable.
- Salary £38,000 + employer NI (15% on earnings above £5,000 ≈ £4,950) + pension (3% ≈ £1,140) + £2,000 PPE/training = £46,090 true annual cost.
- Paid hours: 52 × 5 × 8 = 2,080. Deduct 28 holiday days (224 hrs) plus ~8 sick/training days (64 hrs) = 1,792 productive hours.
- £46,090 ÷ 1,792 = ~£26/hour. The real cost of an hour of that electrician's time.
- Charge out at 2.5–3× (~£65–£78/hr) to cover business overheads and profit.
Employer NI thresholds and the auto-enrolment minimum change most tax years: check the current HMRC rates before relying on the figure. Non-productive time (quoting, travel, admin) is the biggest hidden driver of the true rate.
Typical UK benchmarks
- Average UK Electrician Salary
- £39,039 median gross annual pay for electricians and electrical fitters, SOC 5241 (ONS Annual Survey of Hours and Earnings, 2025)
See it in your business.
Frequently asked questions
What is the true cost of employing an electrician?
The true cost is typically 1.3-1.5x the gross salary. For an electrician on £38,000, the total cost is around £48,000-£50,000 including employer NI, pension, holidays, training, and PPE. This works out to approximately £28-£32 per productive hour.
What charge-out rate should I set for my employees?
A common rule of thumb is to charge 2.5-3x the employee's true hourly cost. If your electrician costs you £30/hour, you should charge £75-£90/hour. This covers the employee cost, business overheads, and profit margin.
How many productive hours per year should I assume?
After deducting holidays, sick days, training, and non-billable time, most electricians have around 1,500-1,700 productive hours per year. Using 1,600 hours is a reasonable estimate for planning.
Do I pay employer NI on the whole salary?
No: employer NI (Class 1 secondary, 15% above the £5,000 threshold, unchanged from 2025/26 into 2026/27) applies only to earnings above the secondary threshold, so this calculator's figure is a slight over-estimate that builds in useful headroom. Rates and thresholds change most tax years, and reliefs such as the Employment Allowance can reduce your bill: check current HMRC guidance for an exact figure.
Should I use CIS subcontractors instead of employing?
CIS subcontractors avoid employer NI, pension, and holiday pay, so the headline cost looks lower, but you lose control over availability, quality, and loyalty, and you must verify each subcontractor and deduct CIS tax correctly. HMRC can also challenge 'disguised employment'. Compare the true employed cost per hour from this tool against a subcontractor's day rate before deciding.
