If you run a nursery, you'll know the wage bill is the cost you can do least about. The ratios mean you can't trim staff the way another business might. When a room fills up, you need another person, and when the minimum wage goes up each April, every hour that person works costs more.
This guide sets out the ratio and qualification rules in the early years foundation stage framework for group settings in force from 1 September 2026. It then works through a made-up example of one room's wage bill, gives the 2026 to 2027 rates for wages and employer National Insurance, and explains what a buyer will look at.
The ratios from 1 September 2026
The EYFS framework for group and school-based providers sets these minimum ratios for nurseries and other settings on the Early Years Register. A teacher here means someone with qualified teacher status, early years teacher status or early years professional status.
| Age of children | Staff to children | Qualifications within that group |
|---|---|---|
| Under 2 | 1 to 3 | At least one at level 3 with suitable experience of under 2s. Half the others at level 2. Half of all staff trained in caring for babies. |
| 2 years old | 1 to 5 | At least one at level 3. Half the others at level 2. |
| 3 and over, with a teacher working directly with them | 1 to 13 | At least one other member of staff at level 3. |
| 3 and over, without a teacher | 1 to 8 | At least one other at level 3. Half the others at level 2. |
The ratios apply to the total number of staff available to work directly with children across the whole provision, not room by room. Children must usually be within sight and hearing of staff, and always within sight or hearing. Exceptionally, and only where quality and safety are kept up, the ratios can be changed. Ofsted can also decide that a setting must keep a higher ratio than the minimum.
The 1 to 13 ratio depends on the teacher working with the children for the vast majority of the time. A teacher who spends most of the week in the office doesn't make a room of three year olds a 1 to 13 room.
Where you have a room for under 2s, the person in charge of it must have suitable experience of working with under 2s. Settings that provide overnight care keep the same ratios, with at least one member of staff awake at all times.
Who counts, and at what level
- The manager. Must hold an approved level 3 qualification or above, and should have at least two years' experience in an early years setting or other suitable experience. Managers appointed on or after 4 January 2024 also need a level 2 maths qualification, or must get one within two years. That doesn't apply to a manager who stays in the same role after a TUPE transfer.
- A named deputy. Someone you judge capable and qualified to take charge when the manager is away.
- Everyone else. At least half of all other staff must hold an approved level 2 qualification.
- Counting at level 3. Staff with an Early Years Educator qualification also need level 2 English. No more than half of those counted at level 3 at any premises can be there through the experience-based route.
- First aid. Staff who gained a level 2 or 3 qualification since 30 June 2016 must get a paediatric first aid certificate within three months of starting, or they can't count in the ratios at that level. Certificates are renewed every three years.
- Apprentices, students and volunteers. Apprentices from 16, and students and long-term volunteers from 17, can count at the level below their course, if they're suitable and hold a current paediatric first aid certificate.
A level 3 practitioner off sick, or a first aid certificate that has lapsed, can take a room out of ratio.
A made-up example of one room
Take a room of 15 two year olds, open 10 hours a day, five days a week, for 50 weeks of the year. Assume its staff work only in that room. At 1 to 5, it needs three staff with the children whenever it's full. To allow for breaks, holiday, training and sickness, the example adds 20% to the hours on the floor.
| Made-up example | Figure |
|---|---|
| Staff hours with the children (three staff for 2,500 opening hours) | 7,500 a year |
| Paid hours, adding 20% | 9,000 a year |
| Average pay across the team | £13.00 an hour |
| Wages for five full-time staff on £23,400 each | £117,000 |
| Employer National Insurance at 15% above £5,000 each, before any Employment Allowance | £13,800 |
| Minimum employer pension contributions at 3% | £2,574 |
| Total staff cost for the room | £133,374 |
| Cost for each hour a child is in the room, when full | about £3.56 |
Full, the room has 37,500 child hours a year to spread that cost over. With 12 children it still needs three staff, so the same cost falls on 30,000 hours, about £4.45 each. With 10 children, two staff are enough and the room needs about a third fewer paid hours. That's why the 11th child matters so much. They bring in one child's fees and funding, and they bring a third member of staff with them.
Now add a wage rise. If the team's average rate went up by 50p an hour, as the National Living Wage did in April 2026 and will again in April 2027, the room's 9,000 paid hours would cost £4,500 more in wages. Employer National Insurance adds £675 and pension contributions £135, about £5,300 in all. For a nursery with several rooms, multiply accordingly.
Wage rates from 1 April 2026 and 1 April 2027
| Rate | Hourly minimum from 1 April 2026 | Rise since April 2025 | From 1 April 2027 |
|---|---|---|---|
| National Living Wage, 21 and over | £12.71 | £0.50, 4.1% | £13.21 |
| 18 to 20 | £10.85 | £0.85, 8.5% | £11.27 |
| Under 18 | £8.00 | £0.45, 6.0% | £8.31 |
| Apprentice | £8.00 | £0.45, 6.0% | £8.31 |
The apprentice rate applies to apprentices under 19, and to those aged 19 or over in the first year of their apprenticeship. After that first year, an apprentice aged 19 or over is due the rate for their age. These are minimums, so a rise at the bottom also presses on the rates above it if you want to keep a gap between a practitioner and a room leader.
Employer costs on top of wages in 2026 to 2027
- Employer National Insurance. 15% on each employee's earnings above £5,000 a year, or £96 a week.
- Younger staff and apprentices. No employer National Insurance on earnings up to £50,270 a year for employees under 21, or for apprentices under 25.
- Employment Allowance. Takes up to £10,500 off the year's employer National Insurance bill. Only one company in a group of connected companies can claim it.
- Pensions. Under automatic enrolment, the employer pays at least 3%, usually on earnings between £6,240 and £50,270 a year.
- Sick pay. Statutory Sick Pay is £123.25 a week, or 80% of average weekly earnings if that's lower, paid for the days someone would normally work once they've been off for at least one full working day, for up to 28 weeks. In a nursery you may need to pay for cover as well, to stay in ratio.
- Holiday. Almost all workers are entitled to 5.6 weeks' paid holiday a year, which is why paid hours always run ahead of hours with the children.
The government sets the next rates each year
The minimum wage rates change on 1 April each year, and the government decides them. In its remit for 2026, it asked the Low Pay Commission to recommend rates for 1 April 2027. The Commission weighs the labour market, the cost of living, the effect on businesses and the wider economy. Two-thirds of median hourly earnings remains the main benchmark for the National Living Wage.
At the Budget on 28 October 2026, the government accepted the Commission's recommendations in full. From 1 April 2027, each rate rises by 3.9%. The National Living Wage goes to £13.21 an hour, the 18 to 20 rate to £11.27, and the rate for 16 and 17 year olds and eligible apprentices to £8.31. The remit also repeats the government's aim of bringing the 18 to 20 rate into line with the National Living Wage, leaving the pace to the Commission. If many of your staff are under 21, plan for that gap closing.
These figures were checked after the Budget on 28 October 2026. The National Insurance, pension and sick pay figures are for 2026 to 2027, so check GOV.UK for the 2027 to 2028 figures before you set next year's budget or fees.
What buyers look at
Expect a buyer to rebuild your wage bill from the rota rather than take the figure in the accounts. These are the things they tend to look at.
- Staff cost per child hour. By room and across the nursery, and how it moves as occupancy rises and falls. Our guide to EBITDA explains how that feeds into the profit a buyer values.
- How close to the minimum you run. A rota with no slack relies on overtime or agency staff whenever someone is off, and both cost more than the rota shows.
- Qualifications on file. Who holds level 3, who counts through the experience-based route, whether first aid certificates are in date, and whether the manager has level 2 maths.
- The age profile. Staff under 21 and apprentices cost less in wages and National Insurance today. A buyer will allow for them turning 21, and for the aim of bringing the 18 to 20 rate up to the National Living Wage.
- The Employment Allowance. A group buyer may already claim it through another company. If so, your company can't, and its National Insurance bill could be up to £10,500 a year higher than your accounts show.
- Next April. Expect a buyer to model the next rise before agreeing a price, because it lands on a cost the ratios won't let them cut.
Your latest inspection matters here too, because inspectors check staff records and paediatric first aid on the day. Our guide to Ofsted report cards covers what they look for. To see roughly what your nursery might be worth on its current wage bill, try our nursery valuation tool.