What's the cost of a 3 day a week Nanny

[Bright_Star]

Hello all

We have a new baby and we are starting to think about childcare. Can anyone please give me an idea of the rough cost of a 3 day a week sole charge nanny, all in including tax and NI? I guess hours would be 8.15 to 6.15.

How are the costs different if it's a nanny share?

I've tried to look it up on the web but finding it hard to fathom the answer so hoping that some ED families out there might be able to help me.

Thanks very much for your thoughts.

[wilko]

I found this calculator really useful to work out the costs when we started a nanny share:

http://www.nannytax.co.uk/calculators/net-to-total-cost

Nannies usually quote their net rates, which is misleading on total cost because you have to add on their tax, their NI and employer's NI.

I think going rates are around ?10-11 net per hr for 1 family or ?12-13 net per hr for a nanny share.

So, for 3 days at 10 hrs a day at ?10 net per hr, you are looking at a gross cost of around ?380 per week or ?1670 per month for 1 child. If it is a share then obviously the increased overall cost is reduced per family, depending on how you split the share. We got nanny tax to sort out the tax for our nanny share as it wasn't a 50/50 split of days. I think it's easiest if both families use the same pay roll company and then they can work out the most tax efficient way to do it.

There are also the added costs of food (our nanny always ate with the kids) and petty cash for activities, bus fares, snacks, emergency shopping etc.

Hope that makes sense/helps.

[Bright_Star]

Thanks very much. That's really helpful.

[Lisa Taylor]

We have a Nanny for 3 days per week - 9hrs per day & pay ?310pw.

Hope you have been succesful in finding the perfect candidate, its not easy!

[montassa]

I assume Lisa Taylor you are paying Tax and NI?

The net rate seems to be around ?10 ph to the nanny..

Here are the calcs for 33 hours a week.. you have to find ?401.86 to pay a nanny ?10 per hour for 33 hours a week..

Gross ?401.86

Tax ?41.87

Empl NI ?29.86

EE NI ?34.34

Net ?330.12

[kyaldron]

I've been looking into this question too, and find the "net rate" idea completely baffling. Surely it's impossible to offer a rate after tax? I have never been offered any kind of a job where rates or salaries were offered that way, and I did heaps of various temporary things as a student (way back).

I am particularly confused as I will be looking to employ a nanny one day a week, so the tax free allowance is likely to be used by a "first job". Meaning I would be paying NI (20% based on montassa's figures?) and 20% tax on the full amount - taking the final rate up to ?14/hr, where as the first employer would be paying considerably less because of the allowance? Nannies often have multiple jobs.

Any comments greatly appreciated, I am trying to work out a fair rate and feel confused.

Thanks

Kirsty

[snowboarder]

We used an agency to find our nanny and they always specified a gross rate per hour for all their candidates. I wouldn't even start to deal with net rates!

[Kate08]

I agree with snowboarder, we have always employed our nannies based on gross pay per hour and I would not agree to a net rate as I would have no control over what the total cost would then be.

[BellendenBear]

Definitely agree a gross rate not net for the reasons already given and also because if you agree a net rate and they have unpaid tax from a previous year you might end up having to pay it. I discussed this with one of the nanny tax companies and there are other scenarios that you could end up in whee what you end up with isn't quite what you expected.

[wilko]

I agree with what everyone has said about agreeing a gross rate for the contract. I did that too for the same reasons mentioned, in particular getting stuck with higher rate tax liabilities. However, the way we worked out the gross rate was by starting with ?10 per hr net (which is what the nanny was seeking)and plugging it into a calculator to establish roughly how much we'd need to pay 'gross' to give the nanny the take home pay she was looking for. The payroll company then applied her specific tax code to give us the exact gross figure to put in the contract.

Kirsty - I found it all really confusing too, but it makes more sense if you think of it like PAYE where you are the employer so you pay the tax and NI to HMRC (quarterly) on behalf of the nanny, and then the nanny just receives her take home pay each month, like any other employer. Why nannies often still think in 'net' terms is a bit of a mystery to me!

[kyaldron]

This is all so helpful. Thanks. I think I will do as Wilko suggests, and work out a gross rate from a net rate if required. It seems like the "net" approach really falls down when the nanny is taking on more than one job, in which case she is effectively asking second and third employers to pay her more than the first employer (who gets the benefit of the tax free allowance).

[etta166]

Usually in this situation the employers share the tax free allowance in proportion to the hours that they each employ the nanny, but not always. This is one reason why it's very important to agree a gross rate of pay, and for the contract to specify gross pay. Otherwise you could be in for a nasty shock if the nanny owes back tax, has a student load, gets another job... The list of reasons that deductions could increase is huge, and on a net pay agreement the employer is liable for them.

yaldron Wrote:

-------------------------------------------------------

> This is all so helpful. Thanks. I think I will

> do as Wilko suggests, and work out a gross rate

> from a net rate if required. It seems like the

> "net" approach really falls down when the nanny is

> taking on more than one job, in which case she is

> effectively asking second and third employers to

> pay her more than the first employer (who gets the

> benefit of the tax free allowance).

[mofy]

Hi,

I am reading this thread because we are first time parents and looking into some part-time child care for our 4 month old and I am unsure about who we should be looking for and how much to pay them. We are looking for someone to come 3-4 half days a week to look after our daughter at our house. I will be at home too, but hopefully getting some work done.

Would this be considered a 'nanny' position? Any guidance on fair pay for this type of work?

Thanks in advance!

[THEO313]

Most nannies say net pay because they are employed so easier to see net pay per week/month.

It's a fulfilling hard job working as a nanny bringing up the next generation so who knows what they are worth net per week but a lot more than they are paid.

There are some amazing nannies out there so. Hope you find one that suits

[etta166]

THEO313 Wrote:

-------------------------------------------------------

> Most nannies say net pay because they are employed

> so easier to see net pay per week/month.

>

No other profession uses net pay, though. All other employees get a gross pay per year, which is specified in their contract. So, for example, a nanny who wants to be paid ?10 ph net, works 8am-6pm, 5 days a week would agree to a yearly salary of ?34,100. This works out as ?10 per hour net if the nanny has a normal tax code and no other atypical deductions. On top of the salary, the employer also pays ?3,607.87 employer's national insurance, making the total cost of the nanny ?37,707.87 a year.

In my opinion, a nanny is worth that. I don't have a problem with nannies getting paid well, because they do a difficult and important job. But that it a totally separate issue from how you agree a rate of pay. My point was, as an employer it is imporant to agree a gross pay with your nanny or you could find yourself having agreed to pay far more than you expected if circumstances change.

[kyaldron]

I have been told it is because domestic workers used to be tax exempt back in the day. The net rate is a hangover and many nanny agencies and "nanny tax" companies are working to change it - for the reason's discussed - a person's tax code is personal and deductions include many things that an employer should not be responsible for - student loans, unpaid tax, and other sources of income.

All very interesting and the best advice seems to be to agree a gross rate, if necessary based on the nanny's expectation of a net rate.

[montassa]

So we did the reverse engineer to get a gross payment.. that we declared as her salary.. we always manage to get to the net of ?10 ph..

i have all the calcs (a full working XLS spreadsheet) if interested..

[amydown]

And nanny tax companies will also help you find the right gross rate by working back from net pay.

I agree that nannies play a very important role in families and totally see the cost of our nanny being worth the financial sacrifice.

I wish however, that more can be done from tax policy point of view (ie making at least a portion of nanny cost tax deductible) to encourage the right economic behaviour of encouraging mums back to work. It seems completely illogical that a family that is providing another full time employment gets no recognition through tax.

In fact, I recently found out that from April 14, employers cannot claim statutory sick leave through National Insurance either if their nanny is to go on long term sick leave. It does make things incredibly difficult for working families to manage, both financially and logistically... This is of course nothing to do with nannies agreeing rates on a net basis but more to do with the UK tax system but worth bearing these potential costs in mind when employing a nanny.

[Jellybeanz]

www.nannytax.co.uk has some very useful calculators!

[brettuk]

Hi, I just found this post on Google. It's fairly old but I thought I would contribute encase anyone else finds this thread.

I have been using Pay My Nanny and they are affordable and they are great. I would suggest checking them out.

.. here's the link ... nanny payroll services

NannyTax I have tried, I didn't like them much - but that's just me, they took a while to get back to me every time I wanted to talk to someone.

Brett

[NorthLondonMum]

We enquired with Little Ones to help find our part time Nanny and they were really helpful and have a very good payroll department, I'd done a bit of research before hiring my nanny so I knew a little bit about having to pay their taxes etc and knew I didnt want to do it myself.

We didnt end up hiring through them but are still using their payroll service and I definitely recommend it.

https://www.littleoneslondon.co.uk/payroll

Otherwise friends of mine use Parental Choice - https://www.parentalchoice.com