Can I afford a nanny?
7 Tips to help you budget for your Nanny costs
Want to employ a nanny but worried about whether you can afford it? At Nannytax, we want to make budgeting for your nanny as easy as possible. Here’s our 7 tips to help you budget for your nanny employment costs.
1. Live-in or Live-out – what working arrangement will suit your family?
Firstly, what hours and days of the week will you require your nanny? A live-out nanny is ideal for daytime care. These nannies work a set number of hours, commute to your house each day and leave at an agreed time.
For parents who have irregular working hours, a live-in nanny may be more suitable for added flexibility. A live-in nanny’s rate of pay is usually less but you must provide them with appropriate accommodation such as a private bedroom and bathroom.
You can refer to our latest Nanny Salary Index to see the average salary for Live in and Live out nannies in your region.
2. Experience and qualifications – do you require a nanny with specialist training?
For example, if you want your nanny to provide some additional tutoring you may be looking at nannies with teaching qualifications. Alternatively you may want a qualified Norland Nanny who has undertaken training such as cyber security and self defence. A nanny’s rate of pay is likely to be more if they have additional qualifications. It is worth checking out current nanny agency job adverts to get an idea.
3. Your legal responsibilities – paying your nanny and getting insured
In order to be a compliant employer in the UK you will need to run payroll, hold Employer’s Liability Insurance and offer a pension scheme if the nanny qualifies. Good news – Nannytax can help you with all this! We offer an end to end payroll service including HR support, a pensions service and an Employers Liability Insurance package.
4. Childcare support – are you entitled to financial help from the government?
You may be entitled to financial support from schemes such as Tax-Free childcare. Eligible parents with children under 12 can get up to £2,000 per child, per year, towards their childcare costs. You will be required to open an online childcare account which the funds will be paid into. We recommend using childcarechoices.gov.uk to work out whether you’re entitled to a support scheme and how much help you can get.
5. Are there other ways of saving money?
If you require part-time childcare you may want to consider a nanny share. Nanny shares are a way of keeping childcare costs down but each family must involved must still fulfil their responsibilities as separate employers – such as paying National Minimum Wage.
6. Agree the nanny’s salary in Gross terms – protect your employment costs!
When you agree to pay a gross salary with your nanny your total costs are protected and you will know exactly how much you are paying each period. If you agree a net salary, you are essentially writing a blank cheque. Learn more about Net vs gross here.
7. Be sure to calculate your total cost
Total Cost of Employment encompasses Employer’s National Insurance contributions and their percentage of the pension contributions. Our calculator can help you work this out here.
Nannytax and Nanny Employment
We’ve given you tips on how to budget and save money but what about saving time? Nannytax can deal with all your nanny employment admin and legal obligations. We offer an all inclusive Nannytax payroll service to ensure your nanny employment experience is a smooth one. We can deal with HMRC, run your nanny’s payroll and pension plus provide you with the right insurance. Discover our award-winning nanny payroll service here or get in touch with our team to find out more today.
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Enable Limited is an Appointed Representative of Fish Administration Limited and authorised by them to sell liability insurance for nannies and their employers. Fish are authorised and regulated by the Financial Conduct Authority. Firm Reference Number is 310172. Fish Administration Limited is registered in England and Wales. Company Registration Number 4214119. Registered Office: Rossington’s Business Park, West Carr Road, Retford, Nottinghamshire, DN22 7SW.