Total cost of employing a nanny
When it’s time to recruit a second pair of hands to help with childcare, it’s important to not make the mistake of thinking that your only expense will be your employee’s salary.
There are other costs of employment you need to consider, this is what we refer to as the total cost. The total cost of employing a nanny is what the employer’s total outgoings will be regarding the nanny’s salary.
Costs of employment
Aside from your nanny’s gross salary, you’re also responsible for:
Employer’s National Insurance Contribution’s
Employer’s pension contributions
The following are examples of the total cost of employing a part-time nanny, including the main salary, employers auto-enrolment pension contributions and national insurance contribution expenses. Dont forget to add £109 per annum to the total cost below to include the employers liability insurance.
| Yearly Total Cost | ||
| London | Rest of UK | |
| Gross Salary | £19,916* | £16,276* |
| Employer’s NI | £1,493 | £990 |
| Pension | £410 | £301 |
| Total cost | £21,819 | £17,567 |
*This salary is based on the assumption that this role is for a part-time nanny working 25 hours. The salaries are based on our 21/22 salary index averages for London and the Rest of the UK. We’ve also assumed that there are no student loan deductions due.
Use our Salary Calculator to work out an approximate total cost from your employee’s gross wage. Enter the gross wage per week, month or year and you will see the total cost split.
Don’t forget about your nanny’s statutory entitlements
Although you’ll be paying your employees every week (or every month) they won’t actually be working every day as they’ll be entitled to
- Holiday pay (including bank holidays)
- Sick pay
- Maternity/Paternity pay and Parental Leave
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.
You’ll also need to make sure that you’ve got the correct employment contracts in place as well as thinking about how to recruit the perfect nanny for your family.
Hiring a nanny might feel overwhelming, but don’t worry – we’ve written a nanny employers checklist to take you through everything you need to know about hiring a nanny from salaries to insurance.
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This handy gross to net salary calculator will work out the total cost to you as an employer, including any pension contributions due as well as your nanny’s weekly, monthly and annual net salary.