What the Latest Budget Really Means for Cleaning Business Owners

The latest Budget didn’t bring a lot of good news for small business owners and certainly not for those of us running cleaning businesses.

For most cleaning business owners, the main impacts will be:

• Extra tax on dividends, and
• A continued freeze on personal tax allowances

Those two alone quietly squeeze what you can actually take home from your business.

But the biggest news for cleaning business owners isn’t in the small print,  it’s front and centre:

• The minimum wage rise in April 2026, and
• The already announced increase in the Real Living Wage by May 2026

On the surface, the headlines sound simple enough:

• A 50p increase in the national minimum wage
• An 85p increase in the Real Living Wage (more in London!)

To most people, that sounds like “just 50p or 85p an hour.”

Unfortunately, that’s not how it works when you’re the one running payroll.

Why 50p and 85p Are Not the Real Numbers

When you employ staff, your costs don’t stop at the hourly rate on the payslip. You also have to factor in:

• Travel time
• Employer’s National Insurance
• Employer’s Pension Contribution
• Holiday pay

When we run the numbers for cleaning businesses, those headline increases look very different:

• A 50p legal minimum wage rise actually costs around 74p per hour
• An 85p Real Living Wage rise actually costs around £1.20 per hour

Most cleaners in our industry are part-time. If a typical cleaner works around 16 hours a week, those extra pennies per hour turn into hundreds of pounds per year per person  and thousands once you look at your whole team.

To put that into context:

• A business with 10 part‑time cleaners on the legal minimum is looking at over £6,000 a year in extra wage costs
• If those 10 cleaners are on the Real Living Wage, it’s closer to £10,000 a year in extra wage costs

And remember, that’s purely from the wage increases. We haven’t even touched on inflation yet!

The Inflation Problem: Price Rises Just to Stand Still

Even if wages weren’t changing, your costs are still going up because of inflation -products, fuel, insurance, software, everything.

If you want your prices to simply keep pace with inflation, not to increase your profit, just to stand still, you’d need to add roughly:

• 70p an hour if you currently charge £20 an hour
• 88p an hour if you charge £25 an hour
• £1.05 an hour if you charge £30 an hour

So any realistic price rise now has to cover both:

1. The real wage increase – 74p or £1.20 per hour, AND
2. The inflation‑indexed increase on your hourly rate

If you don’t do that, you’re not just failing to grow your profit, you’re actually giving yourself a pay cut in real terms. In some cases, you’ll be running jobs at a loss without realising it.

Why This Is Dangerous If You Don’t Act

Labour is already the biggest cost in a domestic cleaning business. Add in:

• Rising product and equipment prices
• Higher fuel and travel costs
• Increased insurance and admin costs

…and you can see how quickly margins get squeezed.

If wages go up and your prices don’t, a few things happen:

• Your profit margin quietly shrinks in the background
• You work harder and take more risk for less money
• You become “busy but broke”  – lots of work, very little left for you
• In the worst cases, the business simply runs out of cash

This isn’t scaremongering for the sake of it, it’s just maths!

If you carry on charging the same rates, you are effectively subsidising your clients out of your own pocket.

Step 1: Know Your Numbers (Use the Payroll Cost Calculator)

The first step is to stop guessing.

You need to know:

• How many hours your team actually gets paid for, including travel time
• Whether you’re paying the national minimum or the Real Living Wage
• What that 74p or £1.20 per hour really means across your whole team

To make this easier, we’ve added a new payroll cost calculator into the DCBN member documents.

With it, you can:

• Plug in your team size, hours and pay rates
• See instantly what the higher pay rates will do to your payroll costs
• Understand how much extra you’re really committing to in wages

If you don’t know these numbers, you’re effectively flying blind.

Step 2: Audit Your Pricing Honestly

Once you understand your payroll costs, the next step is to look at your pricing with complete honesty.

Ask yourself:

• Do my current rates cover:
  • The new wage level (including travel time)
  • Employer’s NI
  • Employer’s Pension Contributions
  • Holiday pay
  • Overheads (fuel, insurance, admin, products)
  • And a proper profit for me as the owner?

Then layer on the inflation:

• Am I adding enough per hour to keep up with inflation (predicted to be 3.5%)?
  • Around 70p at £20/hour
  • Around 88p at £25/hour
  • Around £1.05 at £30/hour

If the answer is “I’m not sure” or “probably not”, you already know there’s a problem.

You’ll need to identify:

• Which clients and jobs are now underpriced
• Which contracts are quietly draining your bank account

Step 3: Raise Prices Based on Data, Not Fear

This is the bit most owners dread, but it’s non‑negotiable if you want a sustainable business.

You need to:

1. Calculate how much you actually need to increase prices to cover:
   • The real wage increase – 74p or £1.20 per hour
   • The inflation‑indexed increase on your hourly rate
   • Your overheads and profit
2. Decide:
   • Which clients you’ll approach first
   • How you’ll phase in changes if needed
3. Communicate clearly:
   • Explain the government wage changes
   • Explain your legal and ethical obligation to pay fairly
   • Position the increase as necessary to keep providing a reliable, professional service

If you avoid this conversation, you’re choosing to take the hit yourself instead.

Step 4: Tighten Up the Leaks

Alongside price changes, it’s a good time to look for “leaks” in the business:

• Travel time – can routes be tightened or grouped more efficiently?
• Overrunning jobs – do you need to increase the booked time or the price?
• Unprofitable clients – are there jobs that simply don’t work at the new wage levels?

You cannot afford to be doing “favour jobs” when your costs have just jumped by 74p or £1.20 an hour, plus inflation!

 

How the DCBN Can Help You Navigate This

All of this can feel overwhelming, and if these numbers make your stomach drop a little, that’s completely normal.

But you do not have to figure it out alone.

As a DCBN member, you have access to:

• The new payroll cost calculator in the member documents
• Weekly 1‑2‑1 mentoring, where we can go through your numbers with you
• Weekly group masterminds, where you can work through these changes alongside other owners
• Training and resources on:
  • Pricing properly
  • Communicating price rises
  • Building a business that is profitable and sustainable, not just busy

We absolutely support fair, legal pay and professional standards in our industry.
But fair pay only works if the businesses paying those wages can survive and grow.

Final Thoughts

This Budget may not have delivered much good news for small businesses, but you still have choices:

• You can ignore the real impact of wage and inflation increases and quietly absorb the cost, or
• You can face the numbers, adjust your pricing and systems, and protect your business and your income

If you’re a DCBN member, your next steps are:

• Log into the members area and use the payroll cost calculator
• Bring your figures to your weekly 1‑2‑1 mentoring or group mastermind
• Ask questions in the community and use the support that’s there for you

The DCBN is here to help you build a sustainable, profitable cleaning business – no matter what the government may throw at us!