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Nanny Costs Advice For Families Employing a Nanny

Employing a nanny already or thinking about employing a nanny?

How much should I pay my nanny in London?
How much does it cost?

Nanny Salary

Pay rates for nannies in London

The average pay rates offered for nannies in London are £11 - £15 net per hour or more. The salary you pay your nanny can differ quite a bit, based on a number of considerations.

  • For example:
  • The nanny’s experience
  • The nanny’s qualifications
  • The location where you live
  • The number of children
  • Do you require
  • a live-in or live-out nanny?
  • a Full-time, Part-time or a Temporary nanny?
  • a bilingual nanny?

Temporary & Part-time Positions

Top salaries are offered for Temporary Nannies and Part-time Nannies

As the competition for candidates to work short hours and/or work temporarily (in terms of job security) is normally very high

nannies filling these positions will typically need to be offered higher hourly wages as compared to full-time nannies.

The salary for Live-out nannies is normally higher than live-in nannies because they don't receive food and accommodation (a room & a separate bathroom).

Additional responsibilities

The flexibility & range of responsibilities included in the job description can also impact on the nanny's fees.

Nanny Employers

Automatic Enrolment

Automatic enrolment is a new law which requires nanny employers to set up a pension for their nanny.

While automatic enrolment into workplace pensions has been rolling out across the UK since 2012, many parents employing a nanny are still unaware about the introduction which is presently being phased in. It is only now that small and micro employers are being required to take action to help their staff to save for later life.

Your nanny will need to be automatically enrolled if the following criteria are met.

They must be:

  • over the age of 22 and below State Pension age
  • earn more than £11,000 per year with you as their main employer


Nanny Pensions

Nannies are employed workers so of course they should be entitled to the benefits that all other employees receive. However, families who employ a nanny are micro employers, and not huge employers or even small businesses. Therefore, this news is likely to be unwelcome by some nanny employers, but it need not be as much of an issue as it may seem at first glance.

Nannytax are probably the biggest and most well-known payroll company who deal with all matters concerning nannies taxation, and they are well prepared to support our families through these changes, and give sound advice about what the costs of employing a nanny will mean with this introduction, and take care of all the required paperwork for parents employing a nanny already or are considering employing a nanny.

There is a lot that can be done to help nanny employers 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 employing 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. At Fulham Nannies we tend to 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 for nannies, paying their tax, and using a work contract. The alternative - not paying into the nannies pension fund, carries penalties that will cost more than the nanny cost of the pension contribution percentage, and devalues your nanny.


When you employ a nanny in your home you officially become an employer meaning you will have to pay tax and National Insurance on behalf of your nanny. Calculating correct nanny taxes can be stressful and confusing to parents as well as time-consuming.

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Way2paye is a recognised payroll company that offers payroll services that comply with HM Revenue and Customs requirements when employing a nanny. With over 17 years experience in commercial payroll and over 15 years experience in nanny payroll providing parents and companies with help on payroll issues and advice on nanny costs.

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Established in 1993, Nannytax is the original, dependable nanny payroll expert and today's UK market leader. They offer a complete service to nannies and families employing a nanny, providing everything needed to meet HMRC requirements, making the whole process simple and stress free!

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