If you’re considering employing a nanny, it’s important to understand the full cost beyond just their salary. While typical nanny pay depends on location, experience, and job requirements, there are additional expenses that come with being an employer. Below, we break down the key costs so you can budget effectively.
Employer Costs Beyond Salary
When calculating how much employing a nanny costs, it’s important to factor in expenses beyond the nanny’s hourly pay. These include:
Employer’s National Insurance Contributions (NI)
As an employer, you must pay National Insurance contributions (NICs) on top of your nanny’s gross salary. This is calculated at 15% on earnings over £5,000 per year
Workplace Pension Contributions
If your nanny qualifies for auto-enrolment, you’ll need to contribute a minimum of 3% of their eligible earnings into a pension scheme.
Nanny Pay – What’s the Typical Rate?
The cost of hiring a nanny varies based on factors such as location, duties, and experience. In general, nanny pay is structured as an hourly rate or an agreed gross salary. Most nannies prefer to be paid gross, meaning before tax and deductions.
In the UK, typical nanny pay can range from £12.21 – £20 per hour gross, depending on experience and region.
Across our client-base the current average wage is £16/hr. Applying this rate to a normal tax-code, and allowing for statutory pension contributions, typical pay figures would be:
| 15hrs/wk | 25hrs/wk | 40hrs/wk |
|---|---|---|
£1,040.00/mth gross |
£1,733.33/mth gross |
£2,773.33/mth gross |
£1,019/mth net |
£1,493/mth net |
£2,200/mth net |
£1,149/mth total cost |
£1,967/mth total cost |
£3,195/mth total cost |
Holiday Pay & Statutory Benefits
Nannies are entitled to 5.6 weeks of paid holiday per year, plus statutory sick pay (SSP) and maternity/paternity benefits if eligible.
Additional Costs to Consider
Beyond salary and employer contributions, there are incidental costs to factor in:
DBS Check
If your nanny doesn’t already have an up-to-date Disclosure and Barring Service (DBS) check, you may need to cover the cost (~£100).
Employer’s Liability Insurance
A legal requirement in the UK, costing £100-£150 per year.
Payroll & HMRC Administration
Managing nanny payroll, tax, and pensions requires specialist support. See our payroll services here.
Nanny Travel Costs
If your nanny uses their own car for work-related tasks (e.g., school runs), you may need to reimburse mileage (typically 45p per mile).
