Outsourcing costs for a UK accounting practice depend on the pricing model, the hours and the type of work, so the useful comparison is not one hourly rate against another but the full cost of an in-house hire against a defined outsourced scope. In 2026/27 an employer pays 15% National Insurance above £5,000 a year, at least 3% pension on qualifying earnings, and 28 days’ paid holiday, before recruitment, equipment and cover. This guide shows how to build that comparison with current GOV.UK rates.
An in-house administrator on £26,000 costs a practice about £29,700 a year in salary, employer NI and minimum pension alone, or roughly £17 per productive hour once statutory holiday is removed. Outsourcing costs are quoted per hour, per block or per month; compare them against that full figure for the same scope.
Key points
- Employer National Insurance is 15% on earnings above £5,000 a year in 2026/27 (GOV.UK: rates and thresholds 2026 to 2027).
- Employers pay at least 3% pension on earnings between £6,240 and £50,270 (GOV.UK: workplace pensions).
- Full-time staff get at least 28 days’ paid holiday, which you pay for but cannot bill (GOV.UK: holiday entitlement).
- With an outsourced B2B supplier, the practice has no payroll, employer NI, pension or equipment costs for the work.
- Compare quotes on scope, hours and review time, not headline rate.
Terms used in this guide
- On-costs: employer costs on top of salary, mainly employer NI, pension, and statutory sick pay.
- Productive hours: paid hours left after holiday, sickness, training and downtime.
- Retainer: a fixed monthly fee for an agreed scope or number of hours.
- Back-office support: recurring non-advisory work such as reconciliations, payroll preparation, onboarding admin, portal tasks and inbox management.
What outsourced back-office support covers
Before comparing outsourcing costs, define the work. For an accounting practice, back-office support usually means:
- Bank reconciliations and payroll preparation (see our bank reconciliation and payroll prep service)
- AML document collection and screening (see outsourced AML checks)
- New client onboarding admin (see client onboarding support)
- HMRC and Companies House portal tasks (see portal admin support)
- Client inbox, billing chases and diary management
None of this needs a qualified accountant, but all of it has to happen reliably every week. The more precisely you list it, the more comparable your quotes will be.
The real cost of an in-house hire in 2026/27
The worked example below uses an illustrative salary of £26,000 for a full-time administrator on 37.5 hours a week. It is not a market survey; replace the salary with your own figure. For reference, the National Living Wage for workers aged 21 and over is £12.71 an hour from 1 April 2026, so this salary sits a little above the legal minimum for those hours.
| Cost item | Rule (2026/27) | Annual cost |
|---|---|---|
| Salary | Illustrative | £26,000.00 |
| Employer National Insurance | 15% of (£26,000 minus £5,000) | £3,150.00 |
| Employer pension (minimum) | 3% of (£26,000 minus £6,240) | £592.80 |
| Direct employment cost | £29,742.80 | |
| Recruitment, onboarding and training | Varies | Your figure |
| Desk, computer, software licences | Varies | Your figure |
| Cover for sickness and leave | Statutory sick pay £123.25 a week or 80% of average weekly earnings if lower | Your figure |
Sources: GOV.UK employer rates 2026 to 2027, workplace pensions, statutory sick pay.
Cost per productive hour
A 37.5-hour week is 1,950 paid hours a year. Take off 28 days of statutory holiday (210 hours) and 1,740 hours remain, before any sickness, training or quiet weeks. £29,742.80 divided by 1,740 gives about £17.09 per productive hour, before overheads. That is the number to hold against an outsourced hourly rate.
The Employment Allowance caveat
Eligible employers can reduce their employer NI bill by up to £10,500 a year through the Employment Allowance. If your practice qualifies and has allowance left over, the marginal NI on one extra hire could be nil. Check your own position before you rely on the £3,150 figure.
Full-time versus part-time hires
Many practices only need 15 to 25 hours of admin a week. The table repeats the calculation for a part-time hire on 20 hours at the same pro-rata salary, with holiday pro-rated to 112 hours.
| Item | Full-time (37.5 hours) | Part-time (20 hours) |
|---|---|---|
| Salary | £26,000.00 | £13,866.67 |
| Employer NI at 15% above £5,000 | £3,150.00 | £1,330.00 |
| Minimum employer pension | £592.80 | £228.80 |
| Direct employment cost | £29,742.80 | £15,425.47 |
| Productive hours after holiday | 1,740 | 928 |
| Direct cost per productive hour | £17.09 | £16.62 |
The hourly direct cost barely changes, but recruitment, equipment, software and management time do not shrink with the hours. Spread over 928 hours instead of 1,740, those fixed items add far more per hour. That is where outsourcing costs often compare well for a smaller practice.
Hidden outsourcing costs to budget for
Outsourcing costs are not only the invoice. A fair budget includes the practice’s own time, especially in the first month.
- Set-up time. Issuing logins, agreeing procedures and walking the team through your software usually takes a few hours of a manager’s time.
- Review. Someone in the practice checks the work before anything is filed or sent to a client.
- Data protection checks. You need a written agreement and, for overseas teams, a lawful transfer mechanism. Our guide to outsourcing and GDPR compliance explains what to put in place.
- Software seats. Some platforms charge per user, so check whether the provider’s team needs its own licence.
Put these into the comparison alongside the provider’s fee, and your outsourcing costs will reflect what the arrangement really takes.
How outsourcing costs are priced
Outsourcing costs are usually quoted in one of four ways. Each suits a different kind of workload, and the same scope can look cheap or expensive depending on the model.
| Model | How it works | Suits | Watch for |
|---|---|---|---|
| Hourly | Pay for time logged | Irregular or trial work | Minimum hours, how time is recorded |
| Block of hours | Prepaid hours used over a month or quarter | Seasonal peaks such as January | Whether unused hours roll over |
| Monthly retainer | Fixed fee for an agreed scope | Steady weekly work | What happens when volume grows |
| Per task or per client | Fee per reconciliation, AML file or onboarding | Volume work with clear units | Definitions of a “simple” and “complex” item |
What drives outsourcing costs up or down
- Complexity. Data entry and reconciliations cost less than work touching HMRC correspondence or payroll, where a mistake carries more risk.
- Transaction volume. Fifty clients with one bank account each take less time than fifty clients with several accounts and card feeds. Hours follow transactions, not client count.
- Repeatability. Work that follows a checklist is cheaper to hand over than work needing judgement each time.
- Seasonality. Quarterly work under MTD for ITSA and the January Self Assessment peak change the hours you need month to month.
- Your review time. Every outsourced task needs some checking, and outsourcing costs should include it. Budget for it honestly.
Five steps to compare outsourcing costs properly
- List the tasks and estimate monthly volume for each.
- Time a sample week in-house so you know the hours you are replacing.
- Cost the in-house option with the table above and your own overheads.
- Ask each provider for a scope-based quote that names tasks, hours and turnaround for urgent items.
- Add your review time to the outsourced figure before you compare.
Location also changes the picture. Our comparison of outsourcing to Ghana, India and the Philippines covers time zones and delivery models, and you can find out how a virtual assistant for accountants fits a smaller practice.
Is outsourcing cheaper than hiring?
Often, for smaller and mid-sized practices, but not always. Outsourcing removes employer NI, pension, equipment, recruitment and cover from the equation, and you pay only for the scope agreed. A hire can work out better when the work is full-time, steady and needs someone in the office. The comparison is only fair when both sides cover the same tasks and you have added your own review time. Outsourcing costs that look higher per hour can still be lower per year if they replace a full salary with the 20 or 30 hours a week you actually need.
FAQs
How much does it cost to employ an admin assistant in the UK?
More than the salary. In 2026/27 add 15% employer NI on pay above £5,000 a year and at least 3% pension on earnings between £6,240 and £50,270. On a £26,000 salary that is about £29,743 a year before recruitment, equipment, software and cover, or roughly £17 per productive hour after statutory holiday.
Do I pay National Insurance on outsourced support?
Not as an employer, when you engage a business supplier and pay its invoices. Employer NI, pension and payroll costs apply to your employees. Your accountant should still confirm the employment status position for any individual contractor you engage, because the rules depend on the facts of each arrangement.
What is back-office outsourcing?
Back-office outsourcing means handing recurring, non-client-facing admin, such as reconciliations, payroll preparation, onboarding admin and portal tasks, to an external team. In-house staff then spend their time on review, advice and client relationships. The practice keeps sign-off and professional responsibility.
Which pricing model keeps outsourcing costs predictable?
For steady weekly work, a monthly retainer with a defined scope is easiest to budget. For seasonal peaks such as January, a block of hours works better. Per-task pricing suits clear units such as AML files or onboardings. Whichever you choose, ask how volume changes are priced before you sign.
How do I get an accurate quote?
Send a task list with monthly volumes, the software you use and your turnaround needs. A provider should reply with a scope naming the tasks, the hours or units and how urgent items are handled. Quotes without a defined scope are hard to compare and tend to grow.
Get a quote built on your scope
Virtual Service Assists works inside your own systems as a B2B supplier, so there is no payroll, employer NI, pension or equipment cost for the work. We quote against the tasks and volumes you give us. Book a consultation and bring your task list.