Fifty pence an hour. That's the headline number. The National Living Wage goes from £12.21 to £12.71 on 1 April 2026, and if you've got a team of five on minimum wage, you might think that's about £50 a week extra.

It isn't.

By the time you've added employer National Insurance, pension contributions, and holiday accrual, that 50p rise costs you significantly more than the number on the payslip. And if you haven't modelled it yet, April is going to hit harder than you expect.

What's Changing on 1 April 2026

Here are the new rates, confirmed by the government:

Age Band	Current Rate	New Rate	Increase
21 and over (NLW)	£12.21/hr	£12.71/hr	+4.1%
18-20	£10.00/hr	£10.85/hr	+8.5%
16-17	£7.55/hr	£8.00/hr	+6.0%
Apprentice	£7.55/hr	£8.00/hr	+6.0%

The 18-20 rate is the one that should catch your attention. An 8.5% jump is aggressive - and if you employ younger staff on weekends or part-time shifts, it adds up fast.

The Hidden Multiplier

Let's take a single full-time employee on NLW. 40 hours a week, 52 weeks a year.

The headline cost:

£0.50/hr × 40 hours × 52 weeks = £1,040 extra per year

That looks manageable. But it's not the real number.

Employer National Insurance

You pay 15% employer NI on everything your employee earns above £96 per week (that's the secondary threshold, which dropped from £175/week in April 2025). On a full-time NLW worker earning £508.40/week from April:

(£508.40 - £96) × 15% = £61.86/week in employer NI

That's £3,217 a year - just in NI. And because the wage went up, your NI bill went up too. The 50p/hr rise adds roughly £156 a year in extra NI alone.

Pension Auto-Enrolment

If your employee is auto-enrolled (most over-22s earning above £10,000 are), you're paying 3% employer pension on qualifying earnings between £6,240 and £50,270.

On a full-time NLW salary of £26,437:

(£26,437 - £6,240) × 3% = £606/year in pension contributions

Holiday Accrual

Every hour your employee works, you're accruing a holiday liability. The statutory entitlement is 5.6 weeks, which works out to a 12.07% loading on their base pay.

£26,437 × 12.07% = £3,191/year in holiday cost

The Real Number

Component	Annual Cost
Base wages	£26,437
Employer NI	£3,217
Pension (3%)	£606
Holiday accrual	£3,191
Total cost to you	£33,451

That single NLW employee doesn't cost you £12.71 an hour. They cost you closer to £16.14 an hour.

The Employer NI Double Hit

Most operators noticed the NLW increase. Fewer noticed what happened to employer National Insurance in April 2025 - and it's still biting.

Two changes hit at once:

The rate went up - from 13.8% to 15%
The threshold dropped - from £9,100/year to £5,000/year

That threshold change is the quiet one. It means you now pay NI on an extra £4,100 of earnings per employee, per year. On a team of five, that's NI on an extra £20,500 of wages you weren't paying it on before.

The threshold is frozen until at least April 2028. So every time wages go up - whether through NMW rises or pay reviews - your NI bill grows on a bigger base.

What the Industry Is Saying

UKHospitality has put the total cost burden on the sector at £3.4 billion annually, broken down as:

£1.9 billion in wage cost increases
£1.0 billion in employer NI
£500 million in business rates changes

Their survey found that 70% of hospitality businesses plan to reduce employment levels. A third will cut trading hours. 15% expect to close at least one site.

These aren't scare stories. If you run a café or bakery, you're already feeling it. The question isn't whether costs are going up - it's whether you've modelled exactly how much, and what you're going to do about it.

What You Can Actually Do

You can't change the NMW. But you can make decisions now - before April - that soften the impact.

1. Model your actual numbers

Don't guess. Work out the true cost of every employee, including NI, pension, and holiday. A 50p rise on paper might mean restructuring a shift pattern in practice.

2. Review your team structure

Are you paying 21+ rates where an 18-20 year old could fill the shift? Are there hours you could consolidate? This isn't about cutting corners - it's about being realistic with a wage bill that just got bigger.

3. Check NMW compliance

If you've got anyone sitting just above the current NMW, they might fall below the new threshold in April. Non-compliance carries penalties of up to 200% of the underpayment, plus naming and shaming by HMRC.

4. Adjust your pricing

If your staff costs have gone up 5-8%, your menu prices probably need to move too. Most customers understand - as long as you're giving them something worth paying for.

5. Look at the full picture

Staff costs don't exist in isolation. Your food costs are moving. Your energy costs are moving. Your rent review might be coming. Model everything together so you're making decisions with the full picture, not reacting to one number at a time.

Try It Yourself

We built a free tool that does all of this maths for you. No login, no spreadsheet, no guesswork.

→ April Wage Impact Calculator

Add your team, apply the April NMW rates (one click), and see exactly what your wage bill looks like from April - including employer NI, pension, and holiday for every employee. You can export the results as a CSV to share with your accountant or business partner.

When You Need More Than a Calculator

The free tool gives you a snapshot. But April isn't a one-off - wages change, NI thresholds move, pension rules evolve, and your team changes shape week to week.

That's what Brikly's StaffBrik does. It tracks the true cost of every employee automatically - NI category, pension status, holiday accrual, the lot. When the government changes the rules, your numbers update. When you hire someone new, their full cost shows up alongside everyone else.

No spreadsheets. No annual panic. Just the real numbers, always current.

Ed O'Brien has run Hunters Cake Company for 17 years across cafés in Witney, Burford, and a bakery in Carterton, Oxfordshire. He's building Brikly - modular tools that give independent café owners the same data the big chains have, without the big chain price tag.