Stop Looking at the Total
Total payroll as a percentage of turnover is a starting point and nothing more. Two practices with identical percentages can have completely different problems: one carrying too many vets for its consultation volume, the other under-using an expensive nursing team.
Split it. Vet payroll, nurse payroll, support payroll and locum cover, each against the income it relates to.
The Ratios Worth Tracking
- Total employment cost to turnover
- Including employer National Insurance, pensions and locum spend. The headline health check.
- Revenue per full-time equivalent vet
- The productivity measure. Define the full-time equivalent basis and keep it consistent, because inconsistent denominators make this number meaningless.
- Vet to nurse ratio
- A practice with too few nurses pushes work up to more expensive people. This is the most common structural inefficiency we see.
- Nurse-generated income against nurse cost
- Nurse clinics, and how much of the nursing team time is chargeable.
- Locum cost as a percentage of clinical payroll
- Persistent locum use is a recruitment problem being paid for at a premium, and it depresses practice value as well as profit.
Where the Cost Actually Sits
Employment cost is not the salary. It is salary plus employer National Insurance plus pension contributions plus the cost of cover during holiday and absence. When modelling a new vet, use the full cost, and add the months before they build a caseload.
The same discipline applies to a pay rise. A 4 per cent increase across a team is more than 4 per cent of the salary bill once employer costs are included.
Team Shape Beats Headcount
Practices under margin pressure often consider reducing headcount. More often the answer is a different shape: more nursing capacity, better delegated workflows and appointment structures that match how the practice is actually used.
That is a slower change than a redundancy and it is usually the one that lasts.
Written by Veterinary Accountants UK editorial team. Published 3 August 2026.
Last reviewed 3 August 2026. [REVIEWER DETAILS REQUIRED BEFORE PUBLICATION]