A UK employer just put a number on the National Insurance and wage rises for businesses – £100,000 in 6 months
Key Points
- RTC Group disclosed that it absorbed roughly £100,000 in additional employment costs in the first half of 2026 compared with the same period of 2025.
- The company attributes the increase principally to higher employers' National Insurance contributions and increases to the National Living Wage and National Minimum Wage.
- That figure equals around an eighth of the group's £786,000 first-half operating profit.
- RTC says the same measures, alongside the Employment Rights Act rollout, continue to change how its clients hire.
- The one division that cut costs ahead of the rises improved its gross margin to 46.1% from 44.0%.
RTC Group absorbed approximately £100,000 of additional employment costs in the first half of 2026 compared with the first half of 2025, principally from increases in employers’ National Insurance contributions and in the National Living Wage and National Minimum Wage.
The AIM-listed engineering and technical recruitment group disclosed the figure in its interim results for the six months to 30 June 2026, which showed revenue of £45.2 million against £48.3 million and profit from operations of £786,000 against £1.3 million.
The additional employment cost equates to around 13% of first-half operating profit.
RTC supplies temporary and permanent labour to the rail, energy, construction, highways, transportation and manufacturing sectors through its Ganymede, ATA Recruitment and GSS brands.
Group Finance Director Sarah Dye said the government decisions on National Insurance and the wage floors have produced further increases in the first half of 2026 against 2025 that affect both direct costs and administrative costs.
Chairman and Chief Executive Andy Pendlebury listed government policy among six headwinds the group expects to carry into the second half, and said that together with the ongoing implementation of the Employment Rights Act, these measures continue to influence clients’ recruitment behaviour.
He described UK business confidence at historically low levels, with employers exercising caution in response to wider economic uncertainty, increased employment costs and forthcoming employment legislation, and said these conditions continue to affect permanent recruitment activity across the sector.
ATA Recruitment, the group’s permanent recruitment business, delivered revenues broadly in line with the corresponding period last year.
Pendlebury said activity remained subdued and that lower levels of employee confidence have reduced labour mobility, resulting in fewer candidates seeking career moves.
Group gross margin came in at 18.3% against 18.4% a year earlier. UK recruitment held its gross margin at 17.8%, which Dye attributed to maintaining margins despite cost increases including the fuel price rise linked to the Iran conflict and the ongoing government-driven employment cost pressures.
Administrative expenses across the group fell to £7.5 million from £7.6 million, a reduction of £0.1 million achieved after absorbing the policy-related increases and general price rises.
