The Cost of Quality Childcare
Advice For Families Employing a Nanny
What type of help do I need? What are the various options? When should I start looking? Are there differences in cost between hiring a nanny that lives in or a nanny that lives out? How much are the agency fees to find me a nanny? What about Ofsted registration and nanny sharing?
How much do nannies cost?
Not sure how much a nanny is going to cost? We're often asked how much does a full-time nanny cost or how much do I pay a nanny, but no matter whether you're employing a nanny to work full-time or part-time, live-in or live-out, there are some universalities that you'll always need to take account of. Find out here!
To help you calculate your budget we have put together some of the most common considerations that may impact what you’ll pay your nanny below.
The typical average hourly rates for an experienced nanny in London range from £11 to £15 net per hour.
The salary you pay your nanny can differ quite a bit, based on the requirements of the role. The most consequential things are the number of hours you require, the nanny's years of experience, and whether you're employing a live-in nanny or a nanny that lives out (also called a daily nanny).
All things being equal a nanny that lives in with your family will cost less than one that lives out in terms of salary, and the salary for a junior nanny - experience-wise, will be less than a nanny with years of career experience.
NOTE: Not only are live-in nannies more affordable they'll also be more flexible, and can be invaluable when ad hoc cover is needed. The salary of a live-out nanny is normally higher than live-in nannies because they don't receive food and accommodation (typically a room & a separate bathroom).
During our interactions with families we work with we're often asked about salaries or the nanny fees. How much should I offer to pay my nanny? What are the current rates of pay for a nanny in London?
The answer is that it depends on a few factors, but first of all, understand that you should always finalise salary agreements using a gross figure, that way the nanny’s salary is least likely to change and you won't end up paying for, say, student loan repayments or any other debt repayments collected from your nanny's gross pay. You can jump to more information on gross vs net here
average nanny salary london
Live-in nanny pay
- average per hour is £13 to £14 gross
- average per week is £800 to £860 gross
- average per month is £3,500 to £3,700 gross
- average per year is £42,000 to £45,000 gross
An experienced full-time live-in nanny in London earns an average of £800 to £860 gross per week, based on a 60 hours working week.
They usually work from 7:00 am to 7:00 pm - Monday to Friday, as well as babysitting twice on weeknights as part of their overall salary.
Some are happy to go off at weekends but others will expect to be able to stay at the work address for weekend.
Live-in nannies are less expensive than live-out nannies as they are provided with food and accommodation.
Live-out nanny pay
- average per hour is £18 to £20 gross
- average per week is £900 to £1000 gross
- average per month is £4,000 to £4,400 gross
- average per year is £48,000 to £53,000 gross
A typical full-time live-out nanny salary In London is around £900 to £1000 gross per week, based on a 50 hours working week.
Typically, live-out nannies work between 7:30 am or 8:00 am and 6.30 pm or 7:00 pm - Monday to Friday, and prefer to do 4 or 5 full days each week as opposed to a few hours a day, as otherwise they would need to find a second job to fit in to make up a 50 hour week.
Live-out nannies tend to charge by the hour using the net rate, so the examples stated above are based on a normal range or lower limit of £14 per hour net and an upper limit of £15 per hour net.
Part-time nanny pay
Part time nannies usually charge the same hourly rate as full-time live-out nannies. However, if the role is just a few hours a day, such as afterschool position, or just a day or two a week, they will likely charge a higher hourly rate as it will be difficult for them to fit in other work in order to earn enough salary for the week, and because part-time roles tend to be less stable. For that reason, it's important to advertise a competitive hourly rate in order to attract candidates to positions with very short hours or days.
Temporary Nanny pay
Temporary nanny rates are usually the same as regular live-out or live-in nannies, except where bookings are only a few hours a day or very short-term. In which case the nanny is likely to charge a slightly higher rate to offset their income.
Overnights | Proxy parenting
Sometimes families require a nanny to be a proxy parent (a nanny that is authorised to act on behalf of the parent) over a couple of nights or a week or more if they need to go away. For these arrangements, it's important to agree the rate beforehand. The usual rate agreement for older children or little ones who are not expected to wake during the night will be the nannies' normal hourly rate until 11 pm and then something in the order of £50 or similar as an overnight charge. In the morning the normal rate starts again when the children wake up.
Generally, the same calculation of an overnight nanny fee applies to when your nanny is travelling with you and is expected to be responsible overnight. If the child is younger or is expected to wake during the night then the nanny will likely charge a bit more.
Junior Nanny | Entry-level Nanny pay
Junior nannies who are often requested for live-in positions would be looking for around £500 to £600 gross per week, which is approx. £26,000 to £32,000 gross a year, based on a 60 hours working week - Monday to Friday with two weeknights babysitting.
Live-out junior nannies tend to be looking for around £750 to £850 gross per week - roughly equivalent to £41,000 to £44,000 gross a year for a 50 hour 5 day week, depending on their level of experience..
Maternity Nurse pay
Most maternity nurses rates are around £22 to £25 per hour gross or about £250 to £300 per 24 hours gross. Maternity nurses are self-employed and will charge according to their experience. They can work 24 hour days, for example: 24/5 (5 days per week) or 24/6 (6 days per week), and can also be booked to work just nights or just days or a combination.
Night Nanny pay
Night nannies rates vary between £18 to £22 per hour gross. As a general rule, night nannies will be self-employed and work 7 pm to 7 am, 8pm to 8 am, or 9 pm to 9 am or similar, and go back to their home during the day.
Nannies who work for two families in a sharing arrangement normally set their fee slightly higher than working with a sole family (similar to how a temporary nanny will offset their fee). But, nanny shares are still less costly than some nurseries and have been increasing in popularity with parents, as an affordable childcare option for families seeking the services of a professional nanny.
Weekend Nanny pay
Weekend nanny positions are ordinarily advertised at a higher rate, whether or not it is a temporary or permanent booking, as the nanny will be working at the weekend.
This is entirely by agreement between both parties but many nannies charge their normal hourly rate for babysitting. Live-in nannies can be expected to babysit two weeknights as part of their overall salary but any more than this should be agreed by prior arrangement and paid as an extra.
Gross vs Net
What's the Difference?
- Gross pay is the total remuneration you pay to your nanny before any deductions are made, for example tax and National Insurance, and any other payroll deductions, such as pension contributions or student loans.
- Net pay is the pay your nanny receives after all taxes and deductions are taken out, or the pay they actually take home.
Agree a gross salary
Unlike most other industries, some nannies still talk in terms of net salary - which is not really a good idea. Fulham Nannies always recommend that families agree on a gross salary with their nanny when an offer of employment is made and, certainly, when you draw up a contract. This is because it's a more accurate way of working out the ‘ true gross pay’ figure that will actually make up your nanny's pay, and that way it will allow you to budget more accurately as your salary payment costs won't change. There are further reasons for agreeing the salary as gross that also benefits the nanny, and a good nanny agency will cover all those points with you and simplify the calculation for you and provide up-to-date advice about other relevant nanny employment issues covered further below on this page.
Other considerations when employing a nanny
One's experience could affect the cost of your nanny
If you're willing to hire a nanny that has little to no experience, you could find a cheaper option than otherwise. For the most part, when nannies have years of successful experience with other families under their belt, they can expect to charge more for their services. You can reach out to their previous clients to learn whether their nannying services are highly recommended.
Nannies who are new to the game, though, are willing to work for both money and experience. That's why you can expect to pay them a little bit less - but not too much less. If you're looking for ways to make your hired nanny more affordable, this can be of advantage to you.
Your specified job requirements
The flexibility and range of additional responsibilities included in the job description can also impact on the nanny's fees.
A nanny share is when two families partner together to each hire the same nanny to care for their little ones. Arrangements vary between families and there are pros and cons, but the costs involved in employing a full-time nanny can be drastically reduced. We explore nanny sharing in more detail on our Childcare Options page.
Temporary & part-time roles
When determining what pay to offer your nanny, the total number of hours can sometimes come into play as nannies are more likely to want to negotiate higher hourly rates for lower total hours, and because the supply for experienced part-time nannies who're looking to top-up their hours is less.
In general, temporary nannies or part-time nannies are typically offered higher hourly rates compared to full-time nannies in an effort to attract applicants, as the nature of these assignments, in terms of job security, needs to be compensated.
The great thing about hiring a nanny is that you can find a childcare solution that suits your family's exact needs. For instance, you can decide between the option of hiring a nanny to work either full-time or part-time in caring for your children. Doing so, of course, will go a long way in determining the overall cost of your nanny.
Full-time live out nanny positions are usually 50 hours a week but the exact hours depend on the family. The costs associated with a full-time nanny go beyond that of basic pay. When you employ a full-time nanny you're hiring a legitimate employee, in essence. You need to be prepared to pay a contribution to their pension fund. Just because a nanny may only work for you for a few years doesn't mean they don't deserve access to a quality retirement in the future. As an employer, it will be your responsibility to help to contribute to that.
Consider the costs of other childcare options
Though the cost of a nanny might be more than you expected, it can still be a more affordable option than others. You might be considering a daycare service for your children while you're at work. Remember, though, that those daycare services can be just that - daytime hours only, and if you're delayed they may charge you a late fee to boot. Whereas you can rely on a nanny to give your children their undivided attention. Live-in nannies are a good choice if your budget is a little tight, they not only help save costs for your family, but also provide flexible cover that you know you can rely on.
Where To Start?
If you're thinking about employing a nanny for the first time it can be difficult to know where to start. Don't worry, whatever stage of the journey you're at we can help you with everything you need to know about hiring - and paying for - a qualified nanny for your family.
What You Can Expect
Employing a nanny is an important task and there are plenty of things to consider once you decide to move forward, here we cover the financial aspects associated with taking on an employee - specifically in London, that you'll want to make sure you understand before you proceed.
As a parent, when you appoint a nanny you become an employer (micro employer), and take on an employer's payroll responsibility and will have to pay Tax and National Insurance, and start paying into a pension on behalf of your nanny.
In addition, you'll need to use a Real Time Information (RTI) compliant Pay As You Earn (PAYE) payroll system to make sure you’re fulfilling your legal obligations and making payroll filings with HM Revenue & Customs (HMRC).
Outlined below are the main considerations for you to make a note of when totting up the associated figures:
- Recruitment cost (if you're using an agency to find a nanny)
- Nanny Salary (hours required, experience, live-in or live-out, number of children to be cared for, sharing a nanny with another family)
- Additional Responsibilities
- Employee's National Insurance & Tax Contribution
- Pension (Employer Contribution) minimum of 3% of monthly salary (subject to change)
- Employer's Liability Insurance
- Real time information (RTI) compliant Pay As You Earn (PAYE) payroll system to make sure you’re fulfilling your legal obligations and making payroll filings with HM Revenue & Customs (HMRC)
- Other Costs (if applicable): Nanny's travel costs, associated medical and travel insurance, and provide adequate food and water for every mealtime, unless alternative arrangements are agreed otherwise and set out in the Contract of Employment; AND For live-in positions, the nanny’s property, contents and any other items of value need to be insured for the duration of the nanny’s employment. AND Car insurance and/or parking permit.
Nanny agency or not
It's entirely possible to source an individual to work for your family just on your own steam, if you have time, either by directly trawling through an online social media platform or registering with an online service who use an algorithm to present you with a filtered list of candidates who're looking for your type of vacancy.
In doing so, there's a potential to save on the cost of paying an agency fee, but there can be drawbacks. So, our advice would be to let an agency do the hard work for you (sourcing & marketing, screening & assessment, coordinate and schedule interviews, negotiations and more). However, if you do go down the DIY route the smartest approach would be to tap into the expertise of your local nanny agency for advice and market insight, which is free with most (good) nanny agencies, and use the information they give to help you find a suitable nanny for your role.
Automatic enrolment requires employers (parents) to set up a pension for their nanny to save for later life.
While automatic enrolment into workplace pensions has been rolling out across the UK since 2012, many parents are still unaware about the introduction.
Nannies are employed workers so of course they should be entitled to the benefits that all other employees receive. However, families who employ a permanent or temporary nanny are micro employers, and not huge employers or even small businesses. Therefore, this introduction might be unwelcome by some, but it need not be as much of an issue as it may seem at first glance.
Much can be done to help parents manage these requirements.
For instance, the percentage contribution doesn't have to be paid on the whole salary. It can be paid on something called 'Qualifying Earnings' (sometimes called 'Banded Earnings') which will be less expensive for the employer.
Once again we see another reason to agree a Gross salary with your nanny as opposed to a net salary according to Nannytax. However, if you have agreed a Net salary with your nanny you will be responsible for paying in both the employer contribution and the nanny contribution. That means you would eventually be paying an extra 7% of your nannies salary!
For some nanny employers an extra £350 to £500 per annum may not be a show-stopper, but for others who have perhaps only managed to afford the costs of taking on a nanny through a combination of nanny sharing and Ofsted vouchers, this may be more of a concern.
Nonetheless, if you're happy with the flexible personal service through having a nanny and it's worked well for you, then this need not be a reason to give up. We suggest talking to a reputable payroll company, such as NannyTax or Way2paye, and find out what you can do to comply and lessen any impact of the costs of employing a nanny.
A good nanny is an investment and soon nanny pensions will be as familiar as, say, statutory holiday entitlement. The alternative - not paying into the nanny's' pension fund, carries penalties that will cost more than the cost of the pension contribution percentage, and devalues your nanny.
How to pay your nanny
If you're exploring your options and seeking individual advice from someone with an understanding of the ins-and-outs of payroll, we strongly recommend you speak with a tax and accounting specialist.
It's possible to do this yourself, but many families choose to use a payroll service to pay their nanny. But if you would like expert help and advice on payroll issues & nanny costs in London, Fulham Nannies recommend the following companies who specialise in providing families with payroll services for their nanny.
If the thought of maintaining payroll on behalf of your nanny makes your head spin, use a payroll service to perform all these obligations and more, it'll save you a lot of time.