How much of your payroll pays for admin?

Key takeaways

The admin share of payroll is the proportion of your total staff cost spent on routine administrative work. Calculate it from hours on routine work multiplied by each person's full cost per hour. Many small firms find it is 20% to 35% of payroll once everyone's admin is counted, not just the administrators'. That figure shows the growth time at stake.

• Count everyone's admin hours, not just administrators'.
• Use full cost per hour, including employer NI, pension and holiday.
• 20% to 35% of payroll is a common finding in small firms.
• The share in growth roles matters most.

How do you calculate the admin share of payroll?

Multiply each person's weekly hours on routine admin by their full cost per worked hour, add the results and divide by total weekly payroll cost. Full cost includes employer National Insurance, the minimum pension contribution and paid holiday, not just salary. A UK employee on £30,000 costs about £19.81 per worked hour on that basis.

• How outsourcing gives your internal team time for growth
• Run work vs growth work: sort your team's hours

What is a worked example?

An illustrative firm of 12 people with an average salary of £35,000: a team growth time audit shows 110 hours a week of routine admin across all roles. At roughly £23 per worked hour, that is about £2,500 a week, or around £130,000 a year, roughly 27% of total payroll cost.

• Hours of admin per week: from a one-week tagging exercise.
• Cost per worked hour: salary plus employer costs, divided by worked hours.
• Admin cost: hours times cost, summed across people.
• Share: admin cost divided by total payroll cost.

• How much of your team's week goes on growth?
• What is an hour of your team's time worth?

Why does the share in growth roles matter most?

Admin done by a salesperson or account manager costs more per hour and displaces growth work. A £40,000 account manager spending 12 hours a week on admin costs the business that time twice: once in salary and once in growth not pursued.

• Skilled staff stuck doing admin? What it costs you
• The opportunity cost of doing everything in-house

When does the figure mislead?

When some admin is genuinely part of client service or compliance and cannot move. Mark those hours separately. The useful number is the admin that could move, not all admin.

• Keep the decision, outsource the admin around it

What does this look like in practice?

A pattern we see: an owner expects admin to be about 10% of payroll because the firm employs one administrator. The calculation shows 29%, because sales, operations and finance staff each spend a day or more a week on routine work.

• See client work
• BPO Solutions for UK businesses

Admin share checklist

• Run a one-week tagging exercise.
• Calculate full cost per hour for each person.
• Multiply admin hours by cost per hour.
• Divide by total payroll cost.
• Separate admin that could move from admin that cannot.

• Leadership team time for strategy, not operations
• What is an hour of your team's time worth?

Next step

Run the calculation for your three most commercially valuable people first. Their admin share is usually the most revealing.