Last year's NI increase cost the hair and beauty sector £139 million, and April 2026 brings another round of wage rises. A full-time stylist on minimum wage now costs you roughly £3,200 a year more than in 2024, so something in your pricing, your rota, or your overheads has to move.

Labour is 60% of most salon budgets, and when wages go up 4%, your costs go up by more than 4% because NI and pension contributions rise with the wage bill.

The April 2026 numbers

National Living Wage (21+) rises from £12.21 to £12.71 per hour, a 4.1% increase.

The bigger hit lands on 18-20 year olds, who go from £10.00 to £10.85. That's an 8.5% jump as the government pushes toward equal pay for over-18s, and salons that employ juniors will feel that rise hardest. Apprentices and 16-17s also rise, from £7.55 to £8.00.

Employer's NI stays at 15% with the £5,000 threshold, so the April 2025 increase is now the permanent baseline.

What two years of rises looks like

A full-time stylist on minimum wage cost you about £23,795 in April 2024. The same person working the same hours in April 2026 costs £26,435, which is £2,640 more in wages alone.

Factor in the NI increase from last year (13.8% to 15%, threshold halved to £5,000) and you're paying roughly £3,200 more per person than you were two years ago. Multiply that across five staff and you're looking at £16,000 in extra costs for the same team doing the same work.

Employment Allowance

The Employment Allowance is now £10,500, and if your total employer's NI bill is under that, you pay nothing.

For very small salons (an owner plus two or three part-timers) this absorbs the NI costs entirely. Bigger teams get some relief but still feel the squeeze, so check you're claiming the allowance. Some businesses miss out because they don't realise they qualify.

What other salons are doing

The National Hair & Beauty Federation surveyed the sector, and the numbers are bleak: 78% of salons are raising prices (the highest on record), 47% are cutting staff hours, another 47% are reducing headcount entirely, and 41% have frozen investment in training, equipment, and refurbs.

Every one of those options has a cost, and so does carrying on as before.

Raising prices

If your prices have stayed flat for two years while your costs rose, you've effectively taken a pay cut.

Be direct about it: "Costs have increased and prices are adjusting from [date]." No apology needed, because everyone knows what's happening with costs. Give two to four weeks notice so regulars can book at the old rate if they want, but don't over-explain. A sentence or two is enough, and long justifications sound defensive.

Raise everything at once, since one price increase is far easier to communicate than three small ones spread over six months. Most clients expect it, and the ones who leave over £3 probably aren't your best clients anyway.

Other ways to protect margin

Price rises aren't the only option. Some salons now charge colour separately based on product used: three tubes, pay for three tubes. Clients can see it's fair, and product revenue isn't subject to the same employment costs as service revenue.

Minimum spend thresholds help too. If a booking falls below a certain value, you add a small fee to discourage 15-minute appointments that don't cover your chair costs.

Retail deserves another look as well. Every shampoo and conditioner you sell is profit without employment costs attached, and most salons leave that money on the table.

A few salons are also trying membership models, like unlimited blow-dries for a monthly fee. It locks in recurring revenue, and clients who pre-pay tend to spend more when they visit.

Team structure

Nobody wants to cut hours or let people go, but two years of wage rises justify a proper look at how the rota is built.

Check your chair occupancy. If stylists are sitting idle for chunks of the day, you're paying wages for empty chairs. Do you need everyone in on quiet Tuesdays? Could some shifts start later or finish earlier?

Some salons are moving to chair rental, which changes the relationship completely and isn't right for everyone. But it does shift your cost base, and the model is worth understanding even if you never make the switch.

Overheads worth reviewing

Before you touch staff or services, look at everything else first.

When did you last negotiate with your suppliers? Loyalty should be worth something, so ask.

Colour mixing waste costs more than you'd think, because small overages across dozens of mixes a week add up. Some salons save 15-20% on colour costs by measuring more carefully.

Check your energy supplier while you're at it, because business energy deals are out there and LED lighting pays for itself within months. And have a look at your subscriptions, because most salons are paying monthly for at least one tool nobody has opened in a year.

What not to do

Cutting training, especially apprenticeships, saves money now but leaves you short of skilled staff in a sector that's already struggling to bring people through.

Going quiet is just as risky. If times are tight, your team already knows, and being honest with them is far better than letting the anxiety build.

And whatever you do, resist the urge to panic-discount. Slashing prices to fill chairs destroys your margins, and you end up busier and poorer at the same time.

Planning for permanently higher costs

These cost increases are permanent, so there's little to gain from waiting for a return to 2024 rates.

The salons that get through this will be the ones who adjust now: setting prices that reflect current costs, keeping overheads under control, building rotas that match demand, and looking at the numbers every week rather than once a year when the accounts arrive.

None of this is fun, but the work you do now buys you a much calmer six months.