UK security charge rate: a cost model

Operations manager seated at a desk in a first-floor office above an empty British street at first light, seen from behind
The wage floor is set in Westminster; every other figure in the rate is decided at a desk like this one.

Nothing has been decided for April 2027. The government asked the Low Pay Commission on 16 March 2026 to recommend the rates that apply from 1 April 2027, and gave it until the end of October 2026 to report. The only number in circulation is the Commission's own estimate of £13.02 to £13.34, central £13.18, published in its consultation letter of 1 April 2026 and described there as indicative only. Any contract you quote this autumn that runs past next April is priced against a floor nobody knows yet. This article covers the rate you build, not the rate a client pays; for the buyer's view see our guide to manned guarding.

In brief: British guarding has no collective bargaining, so the National Living Wage is the only cost your competitors certainly share with you. Everything above it is yours alone. This article builds an hourly charge rate from cover factor, on-costs, sickness, inherited terms, overhead and margin.

The wage floor is not a cost base

The National Living Wage is a payment floor for the officer, not a starting point for a rate. Nothing above it is shared. British guarding has no collective agreement, no binding sector minimum and no regional scale, so two firms paying an officer the same hourly rate can still cost different amounts per chargeable hour.

Since 1 April 2026 the statutory rates are £12.71 for workers aged 21 and over, £10.85 for 18 to 20 year olds and £8.00 for under 18s and apprentices. The industry sits above that floor by a margin that is a commercial decision rather than a rule. The ONS Annual Survey of Hours and Earnings put median hourly pay for security guards and related occupations at £14.00 excluding overtime when it surveyed in April 2025, against a floor of £12.21 at the time. The tenth percentile was £12.22, one penny above it.

That last figure is the one worth sitting with. A tenth of the industry has no headroom, so a floor increase lands on those employers pound for pound. The voluntary Real Living Wage pulls the other way at £13.45 across the UK and £14.80 in London, already above the Commission's lower bound for April 2027.

So the sentence that runs through most rate conversations, that a competitor works from the same costs, is true of the floor and nothing else. Whatever a rival pays above it, whatever premiums they inherited and whatever their absence rate does to their cover is invisible to you and different from yours.

Cover factor: how many paid hours one chargeable hour costs

A chargeable hour costs more than one paid hour, because holiday, sickness and training are paid but never sold. Divide the paid hours a post consumes in a year by the hours you invoice for it, and the result is your cover factor. It belongs to the site, not the company: a portfolio average hides whichever site is losing money.

Two security officers passing in the rear yard of a British commercial building, one walking in through the gate as the other walks out
Both officers are on the payroll while a handover happens; the client is invoiced for one post.

Start with the post rather than the person. Continuous cover is 168 chargeable hours a week, or 8,736 a year, and at the ONS median of 41.9 paid hours for a full-time officer, four officers cover that on paper. On paper is the operative phrase, because each of the four is entitled to 5.6 weeks of statutory paid holiday, capped at 28 days, and somebody else has to be paid to work every hour of it.

The arithmetic is worth doing once. A year holds 52 weeks, of which 5.6 are holiday, leaving 46.4 working weeks, and 5.6 divided by 46.4 is 12.07 per cent. Holiday alone therefore lifts paid hours 12.07 per cent above worked hours, so 8,736 chargeable hours need roughly 9,790 paid hours behind them before anyone falls ill.

This is where firms get caught. The 12.07 per cent figure and rolled-up holiday pay apply to irregular hours and part-year workers only, for holiday years beginning on or after 1 April 2024. The Department for Business and Trade defines an irregular hours worker as one whose hours are wholly or mostly variable and states that a fixed rotating pattern does not qualify, which puts a four-on-four-off officer outside the rule. The percentage remains the correct conversion between hours worked and hours paid on the post; it is the wrong payroll method for rota staff, and rolling holiday pay into their hourly rate is not lawful. Firms that do it tend to pay twice, once in the rate and once in the relief hours they still have to buy.

On-costs do not behave as a flat percentage

Employer National Insurance and pension contributions both sit on thresholds, so neither is a flat percentage of pay. One blanket on-cost percentage across every officer will misprice somebody, usually the part-time and relief staff who cover your absences. Work the pounds out per head, then divide by that person's paid hours.

The example below assumes an officer paid £13.00 an hour for 42 paid hours a week: £28,392 of gross pay across 2,184 paid hours. Both inputs are illustrations. Substitute your own.

Component Basis Per year Per paid hour
Officer pay £13.00 × 2,184 hours £28,392.00 £13.00
Employer National Insurance 15% of pay above the £5,000 secondary threshold £3,508.80 £1.61
Pension, employer share 3% of qualifying earnings between £6,240 and £50,270 £664.56 £0.30
SIA licence, if you carry it £204 spread over three years £68.00 £0.03
Direct employment cost before cover, overhead and margin £32,633.36 £14.94

Read the percentages rather than the pounds and the problem appears. National Insurance runs at 15 per cent, but only above a secondary threshold of £5,000 a year, so on this officer it works out at 12.4 per cent of pay. Pension is a 3 per cent employer minimum, but only on qualifying earnings between £6,240 and £50,270, so it lands at 2.3 per cent. Both thresholds are annual amounts per head, so their value per hour depends on how many hours that head works, and a blended percentage will misprice the full-timer and the relief officer in opposite directions.

Two further thresholds matter on posts staffed by young or low-hours officers. Under 21s and apprentices under 25 carry an upper secondary threshold of £967 a week, so employer National Insurance on them is zero up to £50,270 of annual pay, and a relief officer below the £10,000 auto-enrolment trigger is not automatically enrolled at all. Pay levels and licence costs are covered in our piece on the UK security workforce.

Sickness has been a cost line from day one since April 2026

Since 6 April 2026 statutory sick pay runs from the first day of illness rather than the fourth, and the lower earnings limit has gone, so every officer qualifies regardless of what they earn. The rate is £123.25 a week or 80 per cent of average weekly earnings, whichever is lower. None of it can be reclaimed.

That last point is the one that belongs in the rate. The Percentage Threshold Scheme, which once let employers recover part of what they paid out, was abolished in 2014, and the temporary pandemic rebate ended in March 2022. So one absent officer produces two cost lines on the same shift: the sick pay itself, payable for up to 28 weeks, and the relief officer who fills the post at full cost with their own on-costs attached.

The sick pay side is smaller than most people expect and still worth carrying. On the 8,736 hour post above, losing two per cent of shifts to sickness is about 175 hours, roughly four 42 hour weeks, or around £510 a year and under six pence per chargeable hour. The relief hours behind those shifts are the expensive half and belong in the cover factor. The error is counting neither, which is what a rate card built before April 2026 does when it is rolled forward untouched.

Why your cost model belongs to the site and not the company

When a guarding contract changes hands, TUPE treats it as a service provision change, and the officers assigned to that site transfer with their existing terms and conditions. You inherit whatever the outgoing contractor agreed with them. Three sites can therefore carry three different pay and premium structures inside one company, none of which you set.

Lone security officer walking the empty upper deck of a British multi-storey car park on an overcast morning
Nothing visible on a site tells you what its officers are contractually owed for working it.

GOV.UK lists that situation explicitly among the transfers TUPE covers, alongside the note that employment terms and conditions transfer with the employee, and that only staff clearly identifiable as providing the transferring service are protected. In guarding that identification is rarely difficult, which is exactly why the cost base travels with the contract.

The consequence reaches further than pay. British law sets no statutory uplift for night work, weekends, bank holidays or overtime, so every premium is contractual and the only statutory constraint is that average pay across the hours worked stays above the minimum wage. A night premium on the site you won two rebids ago exists because a competitor priced it in years ago, and it is now your cost. Average that site against the portfolio and you have a guess dressed as a model.

Overhead recovery, and the margin you have to write down

Overhead belongs on the chargeable hour, not on the contract. Take the annual cost of everything that is not officer pay, divide it by the chargeable hours you expect to invoice, and carry the result on every one of them. A rate with no stated margin line still has a margin; you cannot see it, so you cannot defend it.

What goes into the numerator is a longer list than most models allow: contract management and supervision, welfare visits, mobile supervisory cover, screening and vetting, uniform and equipment, the training budget, insurance, and the licence cost per device for the systems your officers carry. That last category has its own pricing logic, covered in our piece on replacing a guard tour system.

Two payroll items refuse to sit on an hour. The Employment Allowance of up to £10,500 cuts the annual employer National Insurance bill by a fixed amount, so it does not scale with contract volume and spreading it across hours flatters every quotation you write. Many guarding firms cannot claim it at all: eligibility requires that you do less than half your work in the public sector, and a portfolio weighted towards councils and NHS sites fails that test. The Apprenticeship Levy sits outside the hour too: 0.5 per cent of the pay bill above £3 million of annual payroll, with a £15,000 allowance.

Then take a position on margin in writing, before the client conversation rather than during it. A rate assembled from costs and rounded to a number that felt acceptable has a margin whether anyone named it or not, and because nobody named it, it is the first thing the next rebid takes.

Four sets of hours, and where the third one comes from

A guarding business runs four sets of hours that are never identical: planned, paid, actually worked and chargeable. The gaps between them are the cover factor, and the model above rests on knowing them per site. A roster gives you the first, payroll the second, and neither tells you the third.

That third figure is what a guard tour system produces as a by-product. COREDINATE timestamps every checkpoint scan against its site and records attendance time alongside it, so the gap between the shift you planned in the roster and the shift that happened is measured, not estimated. Reports and the Daily Occurrence Book then hold a year of that per site, the only honest input a cover factor has. The same records settle a client dispute over hours, which we cover in what proof counts in a security tender.

Frequently asked questions

What will the National Living Wage be in April 2027?

No rate has been set. The Low Pay Commission was asked on 16 March 2026 to recommend the April 2027 rates and must report by the end of October 2026, after which the government confirms them. The only published figure is the Commission's own indicative estimate of £13.02 to £13.34, with a central estimate of £13.18.

Is 12.07 per cent the right way to cost holiday for a security officer?

As arithmetic on a post, yes; as a payroll method for a rota officer, no. The figure comes from 5.6 weeks of holiday across 46.4 working weeks, so it correctly converts worked hours into paid hours. Rolled-up holiday pay at 12.07 per cent is lawful only for irregular hours and part-year workers, and an officer on a fixed rota is neither.

Do I add 15 per cent to wages for employer National Insurance?

Not as a flat figure. The 15 per cent rate applies only to pay above a secondary threshold of £5,000 a year, so the effective percentage depends on how much each person earns. On a full-time officer earning £28,392 it works out at 12.4 per cent of pay. Officers under 21 and apprentices under 25 attract no employer National Insurance up to £50,270.

Can I recover statutory sick pay?

No. The Percentage Threshold Scheme that allowed recovery was abolished in 2014 and the temporary pandemic rebate ended in March 2022. Since 6 April 2026 sick pay also starts on the first day of illness and the lower earnings limit has been removed, so an absent shift costs the employer twice: the sick pay itself, plus the relief officer who covers the post.

Why does one charge rate not work across all my sites?

Because TUPE moves the cost base with the contract. When a guarding contract is awarded to a new provider, the officers assigned to that site transfer on their existing terms and conditions, including any premiums a previous contractor agreed. Three sites can carry three different pay structures, and a company-wide average will overprice some of them and underprice the rest.

Sources

Every rate, threshold and date above was checked against the primary source on 10 September 2026:

A cover factor you measured beats a cover factor you assumed, and the difference is roughly a year of timestamped records per site. Run one post on the 14 day test kit and compare the hours you rostered with the hours the site actually recorded.