UK bosses get 130 times the average worker’s salary: are you paying your staff fairly?

The average median pay for Financial Times Stock Exchange (FTSE) 100 chief executives is now £5.06 million a year – a shocking 130 times more than the average full-time worker earns, new figures from the High Pay Centre show.

With CEO salaries increasing for a fourth year on the trot – driven in part by inflating bonus payments – the figures are being framed as a wake-up call for policymakers. 

Yet, with over a third of small business owners struggling to pay themselves, the picture looks a lot different down the scale.

So, what’s the balance between fairness, survival, and reward? We take a look at what founders should actually be paying themselves, based on business stage and industry norms.

FTSE 100 CEOs are paying themselves over £5m a year on average

For top CEO’s, rank definitely has its privileges. New research from the think tank the High Pay Centre has found that the median average pay for a chief executive of a FTSE 100 company has reached a new record of over £5 million a year. 

This figure is 8.6% up from £4.66m in 2024/25, when CEOs earned 124 times more than the average worker – that ratio has now climbed to 130 times.

Top earners include CEO of AstraZeneca Pascal Soriot, earning £17.7 million, and CEO of GSK Emma Walmsley, who took home £15.7 million in the past year. 

In comparison to their multi-million-pound earnings, it was found that full-time employees in the UK are paid an average of under £40,000 a year, and are seeing their pay packages increase 5% more slowly than top bosses.

While pay-setting committees at big firms argue competitive salaries for top-dogs are necessary to compete with other countries like the U.S., Andrew Speke, interim director at the High Pay Centre, says the figures should stand as a “wake-up call to those who’ve turned a blind eye to rising executive pay”.

The answer? The High Pay Centre believes it lies in a “fat cat tax”, which would involve firms paying a corporation tax surcharge on their yearly profits if the total pay exceeds a specified multiple of the average worker’s salary.

According to Speke, “Not only would this incentivise firms to scale back the levels of corporate wealth flowing to a small handful of individuals but also could be used to raise funds to be invested in education and early years provision, helping to tackle inequality at source”.

For hospitality operators, costs are only going up

For many working inside the hospitality sector, this slump in confidence won’t come as a huge surprise.

In recent years, pubs, restaurants, and cafes have been squeezed from every direction, with the National Minimum Wage increasing again in April, while rises to employer National Insurance contributions have added further strain to already tight payrolls.

On top of this, business rates remain a source of ongoing uncertainty. Analysis from UKHospitality shows the average pub’s bill rose by 15% from April 2026, tacking roughly £1,400 to annual costs. With further increases on the horizon, little room is being left for operators to plan ahead with confidence. 

These cost pressures are being compounded by shifts in consumer habits, too. Changing drinking habits – including a rise in a bring your own booze culture and a broader move towards lower alcohol consumption have hit pubs for revenue and bars particularly hard.

The result is a perfect storm that’s proving too much for many operators to weather. Britain is currently losing 3.4 pubs and restaurants a day, and closures are showing little sign of slowing.

How to pay yourself fairly as a founder

Unlike FTSE 100 CEO’s most founders are working out how to portion a wage without sinking the business. 

When it comes to how to pay yourself as a business owner, things will look a lot different depending on your business structure. For instance, sole traders draw from their profits, partners split the share, and limited company directors combine a modest salary with dividends.

In practice, most small business owners earn around £39,000 a year, though totals can range anywhere from £28,000 to £54,000 depending on experience, industry, and how established the business is. For instance, early-stage founders often pay themselves considerably less, or nothing at all, to keep the business viable.

If you’re considering giving yourself a salary bump, you should check whether your business has consistently been profitable for over six months, you have your debts covered, and you’re capable of taking more without dipping into reserves, first.

It’s also important to look at the company-wide picture. Paying staff fair rates shouldn’t just be a priority for fat cats. It should also be front of mind for small business founders, even if they’re squeezed by rising costs themselves. 

The picture is a lot different for small business owners

It’s not just full-time employees that are feeling the squeeze. Research from the Federation of Small Businesses (FSB) found that 36% of small business owners made less than £25,000 in gross profit over the past year.

To put things into perspective, this is only just above the average salary of a full-time worker on the National Living Wage (£22,200), and a world away from the multi-million-pound packages awarded to chief executives at the UK’s biggest firms.

The findings, which were submitted as evidence to the Low Pay Commission, serve as a reminder that being a “boss” doesn’t automatically mean a bigger paycheque. Oftentimes, it involves working longer hours and carrying more risk. 

It’s also important to note that when you don’t look at either end of the spectrum, the figures look a lot more balanced. According to figures from Payscale, the average gross pay for UK CEOs sits at £73,178 per year – just 2.2 times the average UK employee salary.