Care Staffing Cost and Margin Calculator
Staffing is the largest cost in a care home, typically 55-65% of fee income. Enter your roster mix, agency usage, occupancy and average weekly fee to see your true staffing cost per bed and how it compares to sector benchmarks. NLW £12.71 from 1 April 2026.
Care Staffing Cost and Margin Calculator
Staffing is the largest cost in a care home, typically 55-65% of fee income. Enter your roster mix, agency usage, occupancy and average weekly fee to see your true staffing cost per bed and how it compares to sector benchmarks. NLW £12.71 from 1 April 2026.
Registered nurses on your rota. Enter 0 if you are a residential (non-nursing) home.
National Living Wage is £12.71/hr from 1 April 2026.
Total agency hours across all shifts per week. Enter 0 if you use no agency staff.
The hourly rate the agency charges your home (not the carer's take-home pay).
Blended average across self-funders, LA-funded and FNC-eligible residents.
Staffing at or below the 60% benchmark. Good cost control, but ensure quality and safe staffing ratios are maintained.
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Understanding staffing costs in a care home
Staffing is the dominant cost in a care home, typically accounting for 55-65% of total fee income according to LaingBuisson and Care England data. For a 30-bed home on £1,100 per week average fees, that is £18,000-£21,000 per week in staffing costs alone.
The National Living Wage rose to £12.71 per hour on 1 April 2026, and employer National Insurance increased to 15% on earnings above £5,000 per year from April 2025. Together these changes have added significantly to per-employee costs. A carer on the NLW working 37.5 hours per week costs the employer roughly £2,000-£2,200 per year more than two years ago.
Agency staffing is the most expensive way to fill rota gaps, typically costing 60-100% more per hour than direct employment. Agency dependency above 10-15% of total hours is a financial risk as well as a CQC quality concern. Many inspectors flag high agency use as a continuity-of-care risk.
Pension auto-enrolment requires employer contributions of 3% on qualifying earnings between £6,240 and £50,270 per year. For a 30-bed home with 15-20 care staff, this adds £10,000-£15,000 per year to the staffing bill.
The staffing percentage benchmark of 60% is a guide, not a rule. Nursing homes with high-dependency residents and a higher ratio of registered nurses will naturally run at 62-68%. Residential homes with a lower-acuity population can aim for 55-60%. The key metric is whether the fee income is high enough to sustain a safe staffing level.
Frequently asked questions
What is a typical staffing cost percentage for a care home?
55-65% of fee income is the typical range according to LaingBuisson and sector data. Nursing homes with higher registered nurse ratios often run at 62-68%. Residential homes with lower-acuity residents can target 55-60%. Above 70% is a financial viability warning sign.
How does the 2025 employer NIC increase affect care homes?
Employer NIC rose from 13.8% to 15% and the secondary threshold was cut from £9,100 to £5,000 per year from April 2025. For a care home with 20 direct employees, the combined effect adds roughly £20,000-£30,000 per year in NIC costs compared to 2024/25. The Employment Allowance (£10,500 from April 2025) partially offsets this for eligible employers.
Does the Employment Allowance apply to care homes?
Yes, if the employer's total Class 1 NIC liability in the previous tax year was under £100,000. The Employment Allowance for 2025/26 and 2026/27 is £10,500 per year, offsetting employer NIC. Larger care groups with multiple PAYE schemes may not qualify if any connected company's NIC bill exceeds the threshold.
How should agency costs be managed?
Target agency usage below 10-15% of total rota hours. Build a pool of regular bank workers who can be offered consistent shifts rather than booking through an agency each time. Agency costs at £22-£30/hr compared to direct employment at £13-£18/hr represent a 50-100% premium that directly reduces care home margin.
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Tell us about your care business and we will confirm your exact figures and the compliance steps that apply to you. No obligation.