Free TUPE cost estimator for cleaning, security, grounds, waste and catering contracts
Most SME contractors fear TUPE because they can't put a number on it. This estimator does. Enter the staff list from the tender pack and get a Year 1 cost in under a minute, with a risk score that tells you whether the contract value can carry it. Employer NI, pension and the April 2026 National Living Wage are already built in.
Inheriting workforce
The staff you'll absorb at contract handover under TUPE.
Statutory and contractual costs
Pension auto-enrolment, holiday cover, sick pay, employer NI.
15% (fixed)
Employer NI applies above the secondary threshold (£5,000 per worker per year, fixed). 15% is the 2026-27 rate.
Mobilisation costs
One-off costs to absorb the inherited workforce in Year 1.
Contract value (for risk ratio)
Annual contract value lets the estimator flag risk if TUPE eats too much.
Year 1 TUPE cost
Indicative total
£255,531
Wages are 78% of the bill. The rest is on-costs and mobilisation.
Risk
Tight margins
% of contract
51%
Workable, but price for it. Don't shave the margin further.
Annual gross wages £16,523 per worker | £198,276 |
Holiday cover | £21,353 |
Sick cover | £3,813 |
Pension | £5,948 |
Employer NI | £20,741 |
Training | £2,400 |
Uniform, ID, mobilisation | £3,000 |
| Total Year 1 | £255,531 |
Next step
Price the contract and write the bid in one place.
Find the tender, check you qualify, and draft every answer with your TUPE numbers already in the file. Start your free 14-day trial, no card.
Start free trialOr run the free bid / no-bid check firstWhere the cost goes
TUPE in four buckets.
Most SMEs can quote wages off the top of their head. The other three buckets are where the surprises live. If you need the legal background first, our guide to TUPE regulations in soft FM tenders covers consultation, employee liability information and what the buyer must hand over.
About 75-80% of total
Wages
Hourly rate × hours × 52 × headcount. The biggest line by far. Take the rates from the staff list in the tender pack, never from assumptions.
15-20%
On-costs
Employer NI (15% above £5,000 per worker), pension auto-enrolment (3% employer minimum), holiday cover and sick cover. They add up faster than most SMEs expect.
5-15% buffer
Hidden risks
Occupational sick schemes, contractual perks, holiday carried over, pension transfer. These surface in due diligence, not in the tender pack. Budget a contingency.
One-off
Mobilisation
Uniform, ID, training, induction, equipment handover. Per head it runs £150 to £500 depending on sector. Usually under-budgeted by half.
Worked example
12 school cleaners, £500k contract: tight, not dead.
A multi-academy trust re-tenders cleaning across four schools. The tender pack lists 12 cleaners, all on the National Living Wage, 25 hours a week, statutory holiday and a 3% pension. Here is what the estimator returns.
Inputs
- Staff inherited
- 12 cleaners
- Hourly rate
- £12.71 (National Living Wage)
- Hours per week
- 25
- Holiday / sick days
- 28 / 5
- Employer pension
- 3%
- Training + mobilisation
- £200 + £250 per head
- Annual contract value
- £500,000
Year 1 breakdown
- Wages
- £198,276
- Holiday cover
- £21,353
- Employer NI
- £20,741
- Pension
- £5,948
- Sick cover
- £3,813
- Training + mobilisation
- £5,400
Result
£255,531
51% of contract value. Tight margins.
Bid it, but price supervision and consumables carefully and add a 10% TUPE buffer. One more point on the wage bill and it tips toward high risk.
Employer NI came to more than the pension and sick cover combined. That is the line SMEs forget. Before you price the labour, check the hours themselves with the staff hours calculator. If the incumbent under-staffed the site, you inherit the people and the problem.
Know the TUPE bill before you spend a week writing the bid.
AI Tender Writer shows every live UK soft FM tender, checks whether you qualify, and drafts the answers with you. Free for 14 days, no card.
Where TUPE bites SMEs hardest
Three traps to flag early.
The maths runs cleanly with disclosed inputs. The risk lives in what those inputs hide. Read the tender documents for the employee liability information before you run the numbers.
- Long-service legacy. Staff with 15+ years carry redundancy liability if the buyer cuts the scope. £20k+ per long-serving worker is common.
- Defined-benefit pensions. If the outgoing employer ran a DB scheme, the transfer can sink you. Refuse to bid without a buyer indemnity.
- Contractual sick schemes. Some legacy contracts pay full salary for 26 weeks of sickness. That transfers too. Ask for a sample contract.
TUPE by sector.
Cleaning tenders carry the heaviest TUPE lists: dozens of part-timers on short shifts, each one pulling a separate NI calculation. Security guarding tenders come next, with long shifts and SIA licence costs on top.
Grounds maintenance transfers tend to be smaller crews with seasonal staff, so check whether the list shows summer or winter headcount. Waste management contracts often move HGV drivers with overtime baked into their pay. Catering contracts in schools bring term-time-only contracts and holiday pay quirks.
Whatever the sector, the TUPE number feeds straight into your go or walk decision. Run it through the bid / no-bid decision tool, then check you can pass selection with the SQ readiness checker. When you write the workforce and mobilisation answers, the bid writing examples guide shows what a scoring answer looks like, and the bid answer grader scores your draft before the evaluator does. Want a live contract to practise on? Browse open soft FM tenders, or read how firms win cleaning contracts with TUPE in scope.
TUPE cost questions, answered.
How do I calculate TUPE costs for a new contract?
Add up six lines for every worker you inherit: annual wages (hourly rate × weekly hours × 52), holiday cover, sick cover, employer pension, employer National Insurance, and one-off mobilisation (training, uniform, ID). Multiply by headcount and compare the total with the annual contract value. The estimator above does exactly this with 2026-27 rates. For 12 cleaners on £12.71 working 25 hours a week, the Year 1 bill lands around £255,500. Then add a 10 to 15% buffer for whatever due diligence turns up, because it always turns up something. The staff list in the tender pack (the employee liability information) gives you the inputs.
What is employer's National Insurance for 2026 to 2027?
15% on earnings above the secondary threshold of £5,000 a year per worker. That threshold hits part-time soft FM staff hard. A cleaner on £12.71 for 25 hours earns £16,523 a year, so you pay 15% on £11,523, which is £1,728 per head. Across a 12-person transfer that is £20,741 a year before you have paid a single wage rise. HMRC publishes the figures on its rates and thresholds for employers page. The Employment Allowance can offset some of this if your business qualifies, but don't price a bid assuming you keep it.
Can I pay TUPE staff less than they earned before?
No. TUPE protects existing terms and conditions, so the hourly rate, contracted hours, holiday entitlement and most contractual benefits move across with the worker. Changes made because of the transfer are void unless you have an economic, technical or organisational reason entailing a change in the workforce, and even then you need consultation and agreement. What you can do is harmonise upwards. If the transferring rate sits below the National Living Wage of £12.71 from April 2026 (aged 21 and over), you must lift it on day one. Price that in.
What percentage of the contract value should TUPE be?
Under 50% of annual contract value is manageable. It leaves room for supervision, consumables, equipment, overheads and profit. Between 50% and 70% the bid still works, but only with tight cost control and no slack for a sick spike. Above 70% the contract is basically the workforce, and one wage uplift wipes out the margin. Security and cleaning contracts run the highest ratios because labour is almost everything. Grounds and waste carry more plant and fuel, so their TUPE share usually sits lower.
What costs does a TUPE estimate usually miss?
Four things catch SME bidders out. Contractual sick pay above SSP (some legacy contracts pay full salary for months). Accrued holiday carried over from the outgoing employer. Pension rights from a public-sector or defined-benefit scheme, which can be ruinous if the buyer offers no indemnity. And redundancy exposure on long-serving staff if the buyer cuts the scope in Year 2. The estimator covers the predictable lines. Ask the buyer for sample employment contracts and a full employee liability information pack before you commit to a price.
Is this TUPE calculator legal advice?
No. It is a pricing aid built on published statutory rates and your inputs. It will get you a defensible budget number in a minute, which is what you need at bid / no-bid stage. Every actual transfer still needs proper due diligence with an HR adviser or employment lawyer, especially on consultation duties and measures you plan to take after the transfer. The legal risk of getting TUPE wrong sits with the incoming contractor, not the buyer. Treat the result as the start of the conversation.
Sources
- Transfer of Undertakings (Protection of Employment) Regulations 2006, legislation.gov.uk
- Rates and thresholds for employers 2026 to 2027, HMRC
- National Minimum Wage and National Living Wage rates, GOV.UK
- Workplace pensions: what you, your employer and the government pay, GOV.UK
- Business transfers, takeovers and TUPE, GOV.UK
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