Pricing a cleaning contract that still pays after holidays, on-costs and next April's rise

Written for owners of UK cleaning businesses: contract cleaners for offices, schools, healthcare and soft FM subcontracts, domestic cleaning firms, agencies and apps, and specialists in after-builders, end-of-tenancy, window, carpet and biohazard cleaning.

The short version

1. Work out the hours from the specification.Time your own sample cleans task by task, adjust for the site, apply the specification's frequencies, then turn the weekly hours into cleaners and shifts.
2. Cost each hour the cleaner actually cleans.Add employer National Insurance and pension to a year's pay, divide by the hours cleaned after holiday, then add supervision and consumables.
3. Divide for overhead and profit, never add.For example, 20% overhead and profit means dividing by 0.80, not adding 20%. Before signing, agree a clause so April's wage rise moves the price.

A cleaning contract is a price for hours of people's time. Priced on the hourly wage alone, it loses money. You pay a cleaner for 52 weeks but they clean for about 46, and employer National Insurance, pension, supervision, consumables and your own overhead all sit on top of the wage.

Build the price in five steps

1. Hours from the specification.Time your own sample cleans task by task, adjust them for the site, and apply the frequency schedule in the specification. That gives the cleaning hours each week.
2. The staffing pattern.Turn those hours into posts: how many cleaners, on what hours, at what times of day.
3. The cost of each productive hour.Add employer National Insurance and pension to a year's pay, then divide by the hours actually cleaned: weekly hours x 46.4 productive weeks, after 5.6 weeks of holiday.
4. Supervision, absence cover, consumables, equipment and insurance.Add each as a cost per hour on top of labour. Size absence cover on your own absence data: statutory sick pay has been payable from the first day of sickness since 6 April 2026. As of Oct 2026.
5. Overhead and margin.Divide the cost per hour by one minus your overhead share and net margin. Divide, do not add: margin is a share of the price, not of the cost.

The worked figures below use UK-wide rates for 2026/27, ex VAT: employer Class 1 National Insurance at 15% above £5,000 a year, subject to reliefs, and the minimum employer pension contribution, normally 3% of qualifying earnings between £6,240 and £50,270. Automatic enrolment is triggered at £10,000 a year; the figures assume eligible enrolled staff. They are before the Employment Allowance and leave out sickness, absence cover and travel, so add your own. As of Oct 2026.

At £19.07 only 72p an hour is left for overhead and profit once holiday, National Insurance, pension, supervision and consumables are paid. As of Oct 2026.

If the client wants the real Living Wage

Re-cost every post; do not just add the wage difference. On the same conventions, a 25-hour post at the 2026/27 rate of £14.10 an hour costs £20,692.20 a year, or £17.84 per productive hour. At the London rate of £15.45 it is £22,763.10 and £19.62. Show the gap openly in the tender rather than absorbing it. The Living Wage Foundation announced these rates on 15 October 2026; accredited employers pay them by 1 May 2027. As of Oct 2026.

Next April is already in the price

The fix is a clause, agreed before you sign, that moves the price when the law moves your costs. Typical wording: "The Contract Price shall be adjusted from the date any statutory change to pay or employer costs takes effect (including the National Living Wage, employer National Insurance contributions, auto-enrolment contributions and statutory sick or holiday pay) by the Contractor's additional cost, shown by an open-book calculation."

The April 2027 rates were announced on 28 October 2026: £13.21 an hour at 21 and over from 1 April 2027. Send uplift letters now. If a contract has no clause and the client refuses, ask for a variation with the open-book figures. If that is refused, give notice under the contract or rescope the hours with the client's written agreement. Never cut pay below the minimum wage or squeeze unpaid minutes out of the shift. As of Oct 2026.

Asked in Greymill

Ask it about your own business

Paste this into Greymill with your own figures, and Cash & Profit works it through for your business.

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