Paying your nanny

If you employ a nanny you'll need to understand their pay and conditions

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What does a nanny charge?

Employing a trained nanny is, naturally, more expensive than employing untrained help or an au-pair. Salaries vary regionally and are higher for live-out nannies but according to Julie Weir, Recruitment Consultant at the London based Eden Nanny Agency, daily nannies in central London have the highest average salary at £21-31,000 net, based on their position and experience. Their live-in counterparts earn £18-20,000 net.

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However, salaries can go up to as high as £38,000 for a daily in London. Live-in nannies who work a six-day week or work overnights will also earn more.

Net v Gross

Nannies generally quote a net salary. Add on natural insurance and tax and you’ll be looking at a gross salary of as much as half again. As a general guide, a salary of £400 per week net will cost you approximately £600 per week gross including and a salary of £500 per week net will cost you approximately £760 per week gross including tax and national insurance.

Why do you pay your nanny’s tax and national insurance?

It is the employer’s responsibility to pay tax and national insurance. External company Nannytax.co.uk exists to help on all matters of payroll for you for an annual subscription of £270.

Do you need to take out employer’s liability insurance?

Yes. It is a legal responsibility that you have employer’s liability insurance and provide a safe work place for your nanny. You can extend your existing household insurance so that it covers you to have someone work within your home.

What about nanny insurance?

Not all nannies have insurance but some will ask their employer’s to pay it for them. The average cost is between £70-£100 per year. If a nanny is registered with Ofsted, then they are required to have it.

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Can you use childcare vouchers to reduce the cost of your nanny?

Yes. To use the vouchers you must employ an Ofsted registered nanny. You also need to be employed and your employer must set up the childcare voucher scheme. For more information, go to www.nannytax.co.uk

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