Pub Wages and Labour Costs: What to Pay and How to Control Costs

You check the bank balance on a Tuesday morning and the number stares back at you. Wages went out yesterday, and suddenly the buffer you thought you had is gone. Again.

If that feeling is familiar, you are not alone. Labour is the single biggest controllable cost in most pubs, and it is the one that creeps up fastest when you stop watching it. Pay too little and your best people leave. Pay too much, or schedule too loosely, and your profit evaporates before you pour a pint.

This guide breaks down what pub staff actually cost in 2025, what the benchmarks are, and how to control labour spend without burning out your team or yourself.

The real cost of employing someone

Before we talk about hourly rates, you need to understand that the number on a payslip is not what a staff member actually costs you.

On top of the gross wage, you are paying:

• Employer National Insurance — 15 percent on earnings above the threshold (from April 2025, with the secondary threshold dropping to 5,000 per year)
• Workplace pension — minimum 3 percent employer contribution on qualifying earnings
• Holiday pay — 5.6 weeks statutory entitlement, which for a part-timer on irregular hours is calculated as 12.07 percent of hours worked
• Statutory sick pay — 116.75 per week when staff are off sick for four or more days
• Training and induction costs — the hours you or your manager spend getting someone up to speed
• Recruitment costs — job ads, interview time, trial shifts, DBS checks if needed

A rough rule: the true cost of employing someone is 15 to 20 percent above their gross hourly rate. So a bar team member on 12.50 per hour is really costing you closer to 14.50 to 15 per hour when you account for everything.

Current UK wage rates for pub roles

These are realistic market rates as of April 2025. Minimum wage is the legal floor, but in most areas you will need to pay above it to attract and keep decent people.

Bar staff

Level	Hourly rate	Notes
National Living Wage (21+)	12.21	Legal minimum from April 2025
Typical bar staff	12.50 to 13.50	Competitive in most areas outside London
Experienced bar supervisor	13.50 to 15.00	Shift responsibility, key-holding
London and south-east premium	+1.00 to 2.00	Cost of living adjustment

Kitchen

Role	Hourly rate	Notes
Kitchen porter	11.44 to 12.50	Under 21s can be at lower NMW band
Commis or junior chef	12.50 to 14.00	Learning the ropes
Chef de partie or pub chef	14.00 to 17.00	Can run a section or a small kitchen
Head chef (small pub)	16.00 to 20.00	Or 32K to 40K salaried
Head chef (busy gastro)	20.00 to 25.00	Or 40K to 50K salaried

Management

Role	Salary range	Notes
Assistant manager	26K to 32K	Shift running, stock management
Deputy manager	30K to 38K	Full operational responsibility
General manager	35K to 50K	P&L accountability, team leadership

These numbers vary by region, size of operation, and whether accommodation is included. If you provide a live-in arrangement, you can deduct a maximum of 10.66 per day (from April 2025) under the accommodation offset rules, but factor this into your calculations honestly.

Calculating your labour cost percentage

This is the number you need to know and track every single week. Not monthly. Weekly.

Labour cost percentage = Total labour costs / Total revenue x 100

Total labour costs means everything: gross wages, employer NI, pension, holiday accrual, agency staff, and any staff meals or benefits.

Here is a simple example:

• Weekly revenue: 8,000
• Total wage bill (including on-costs): 2,200
• Labour percentage: 27.5 percent

That is healthy. But watch what happens if trade drops by 15 percent and you do not adjust the rota:

• Weekly revenue: 6,800
• Same wage bill: 2,200
• Labour percentage: 32.4 percent

You have gone from a well-run pub to one that is bleeding margin, and nothing changed except footfall.

The benchmarks

Labour percentage	What it means
Under 22%	Either very efficient or probably understaffed. Check service quality
22% to 25%	Excellent. Tight operation with good systems
25% to 30%	Industry benchmark for a well-managed pub
30% to 35%	Amber zone. Review rota and revenue immediately
Over 35%	Red zone. Unsustainable unless you are a premium gastro with high GP

The target varies slightly by format. A wet-led pub should aim for 20 to 25 percent because drinks service needs fewer hands. A food-led pub will naturally sit higher at 28 to 32 percent because kitchens are labour-intensive. Know your format and set the right target.

Rota optimisation: where the real gains live

Most pubs do not have a pay rate problem. They have a scheduling problem. The rota is where labour costs are won or lost, and most licensees build rotas based on habit rather than data.

Use EPOS data to match staffing to trade

Pull your hourly sales reports for the last eight weeks. You will almost certainly find:

• Quiet periods you are overstaffed for. Monday and Tuesday lunches where you have two on the bar and serve 15 covers. One person can handle that.
• Busy periods you are understaffed for. Friday from 5pm to 7pm where one frantic bartender is losing sales because the queue is three deep.
• Shift overlaps that waste hours. Two people both scheduled 12 to 8 when one could start at 2 and cover the evening.

Build your rota around what the till actually tells you, not what feels right.

For more on using your till data to drive decisions, our guide on EPOS data and revenue walks through exactly how to pull and act on these reports.

Stagger shifts

Instead of having your whole team start and finish at the same time, stagger arrivals and departures. A typical pub day might look like:

• 10:00 — One opener: stock check, prep, clean
• 11:30 — Second person arrives for lunch service
• 14:00 — Lunch team member finishes or goes on break; afternoon cover starts
• 17:00 — Evening team arrives; overlap with afternoon for handover
• 23:00 — First evening person leaves; closer stays to cash up

This approach means you are only paying for the hands you need at each point in the day. It takes more thought to plan but reclaims hours every week.

Cross-train your team

A bar team member who can plate a basic lunch menu. A kitchen porter who can pull pints during a quiet spell. Cross-training gives you flexibility to run leaner without compromising service.

At The Anchor, cross-training has been one of the most effective labour control tools we have. When someone calls in sick or trade is lighter than expected, we can adjust without calling in extras or paying overtime.

The four-week rolling rota

Build a four-week rota template based on your trading patterns. Week one is your base. Adjust for known events, seasonal shifts, and bookings. Review actual trade against the rota every Monday morning and make next week's adjustments.

The discipline is in the review cycle. A rota you set and forget will drift. A rota you review weekly stays tight.

Overtime versus hiring: when to make the call

Overtime is tempting because it feels simpler than recruiting. But it is almost always more expensive than you think, and the hidden costs compound fast.

The true cost of overtime:

• Time-and-a-half or double time on the premium hours
• Fatigue leading to mistakes, breakages, and slower service
• Resentment from staff who feel overworked
• Higher turnover, which triggers expensive recruitment cycles

The break-even calculation:

If you are regularly paying 10 or more hours of overtime per week to cover gaps, a part-time hire at standard rate will almost certainly be cheaper. Run the numbers:

• 10 hours overtime at time-and-a-half on 13 per hour = 195 per week
• 10 hours for a new starter at 12.50 per hour (plus 20% on-costs) = 150 per week

That is a saving of 45 per week, or over 2,300 per year, and you get a fresher, less overworked team.

The tipping point is usually around 8 to 10 regular overtime hours per week. Below that, overtime is fine as a flex tool. Above that, recruit.

If you are struggling to find good people, our pub recruitment guide covers where to look, what to put in job ads, and how to spot the right candidates.

Tips legislation: what you need to know

The Employment (Allocation of Tips) Act came into force in October 2024 and changed the rules significantly.

What the law now requires:

• All tips, gratuities, and service charges must be passed to workers in full
• You cannot make any deductions from tips (not even for credit card processing fees)
• Tips must be distributed fairly, using a written policy
• You must keep records of all tips received and distributed for three years
• Workers have the right to request their tip records
• Agency workers are included

What this means for your labour costs:

Tips are not part of wages. You cannot use them to top up someone to minimum wage, and you should not factor them into your pay rate calculations when setting hourly rates. If your business model relied on tips subsidising low base pay, that model is now both illegal and unreliable.

For most small pubs where tips are modest, this is straightforward. Write a clear policy, distribute tips at the end of each shift or week, and keep a simple spreadsheet record.

Seasonal staffing: flex without chaos

Pub trade is seasonal. Christmas, summer, bank holidays, and local events drive peaks. January and February bring troughs. Your staffing needs to flex with this, but doing it well requires planning, not last-minute scrambling.

Building a flexible team structure

Think of your team in three tiers:

Core team (60 to 70 percent of hours): Your permanent staff who work regular shifts. They know the operation, carry the standards, and give you consistency. Invest in these people. Losing them is expensive.

Flex team (20 to 30 percent of hours): Part-timers, students, and second-jobbers who want regular but flexible hours. They fill your weekends and busy periods. Keep them engaged with consistent shifts and include them in team communication.

Casual pool (5 to 10 percent of hours): People you can call for one-off events, Christmas, or emergency cover. Build this list proactively. Former staff, local students, people who have enquired about work. Having five names you can text on short notice is worth its weight in gold.

Adjusting for the quiet months

January and February are brutal for most pubs. Rather than keeping the same rota and watching your labour percentage climb to 35 percent, plan for it:

• Reduce opening hours on the quietest days (close Monday lunchtime if you serve 8 covers)
• Drop to minimum staffing levels and flex up only when bookings justify it
• Use the quiet period for training and deep cleaning — productive hours rather than standing-around hours
• Offer reduced hours to flexible staff who are happy to take them

The key is making these decisions before the quiet period hits, not reacting week by week as the numbers get worse.

Keeping good people without breaking the budget

There is no point controlling labour costs if your best people keep leaving. Recruitment costs, training time, and the dip in service quality during transition are all hidden labour expenses that blow your budget.

Some practical retention strategies that cost little or nothing:

• Consistent, fair rotas published in advance. Nothing drives pub staff out faster than last-minute schedule changes
• Genuine recognition. Name people when they do well. In front of the team, in front of customers. It matters more than you think
• Development opportunities. Cellar management training, cocktail skills, food hygiene courses. People stay where they are growing
• Flexible shift patterns for parents, students, and people with second jobs
• Staff meals and drinks during shifts. A small cost that signals respect

For a deeper dive into keeping your team motivated when budgets are tight, read our guide on staff motivation without pay rises.

Your action plan

This week

1. Calculate your current labour cost percentage using last week's actual figures
2. Pull your EPOS hourly sales report for the past eight weeks
3. Compare staffing levels to trading patterns and identify at least two shifts where you are overstaffed

Within 30 days

4. Build a four-week rolling rota template based on actual trade data
5. Cross-train at least two team members in a secondary role
6. Write and distribute your tips policy if you have not already done so
7. Start tracking labour percentage weekly on a simple spreadsheet

Within 90 days

8. Review overtime patterns and assess whether a part-time hire would be cheaper
9. Build your casual staffing pool with at least five reliable contacts
10. Set a quarterly review cycle for pay rates against local market conditions

Results you can expect

Immediately: A clear picture of where your labour money is going and where the waste sits.

Month one: A rota that reflects actual trade patterns rather than habit. Most pubs reclaim 3 to 5 percent on labour costs in the first month of proper rota management.

Month three to six: A stable, cross-trained team with lower turnover. Your labour percentage should be consistently within the 25 to 30 percent benchmark, freeing up cash for marketing, maintenance, or simply a healthier bottom line.

At The Anchor, getting serious about rota management and cross-training was one of the operational changes that helped us add significant value to the business. When you control your biggest variable cost, everything else gets easier.

Common objections

"I cannot get anyone to work for minimum wage." Then do not pay minimum wage. Pay 50p to 1 above it and you will be competitive in most areas outside London. The cost of that extra 50p per hour is far less than the cost of constant recruitment.

"I need everyone on Friday and Saturday so I cannot stagger shifts." You probably need everyone for four or five peak hours, not the full shift. Stagger start times so you have maximum coverage from 6pm to 10pm without paying for idle hours at 3pm.

"My team will leave if I cut their hours." Have an honest conversation. Some staff want fewer hours but are afraid to ask. Others need consistent income. Find out who is who and build the rota accordingly.

"I do not have time to track labour percentage every week." It takes ten minutes. Pull your total wage cost from your payroll system, pull your total revenue from your EPOS, divide one by the other. If you do not have ten minutes for the number that determines your profitability, that is the real problem.

For broader strategies on improving your pub's financial position, see our guide on revenue levers for struggling pubs.

The bottom line

Labour is not a cost to be slashed. It is an investment to be managed. The pubs that get staffing right pay fair wages, schedule intelligently, invest in their people, and track the numbers every single week.

You do not need to be a spreadsheet wizard or an HR consultant. You need three things: accurate data on what your labour actually costs, a rota built on trade patterns rather than guesswork, and the discipline to review both every week.

Get those three things right and you will run a tighter, happier, more profitable pub.

If you want an experienced set of eyes on your labour costs and wider pub operations, get in touch with Orange Jelly. We work with licensees across the UK to get these fundamentals right.