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March 18th, 2024
By Faith McNamara

How much will it cost to employ a Nanny in 2024/25?

Hiring a Nanny in 2024 is a fantastic investment for your family. This is especially true if you are seeking a highly qualified Nanny in London’s most popular areas where Nannies are highly sought-after. In this article, the Little Ones Payroll Team will give you a thorough insight into the projected costs of hiring a Nanny in the UK in the 2024/25 year.

National Averages for Hiring a Nanny

Determining the cost of hiring a Nanny based on the national average is a rather complex exercise considering the vast number of variables. These involve the Nanny's qualifications, level of experience, duties and responsibilities, type of placement, and location.

Several of the latest surveys and market analyses suggest that the average income for a full-time Nanny in the UK may be between £20,000 and £40,000 in a year, which is quite a broad figure. Let’s break down the factors that contribute to the costs of hiring a Nanny.

Families should estimate not only their gross wages but also their employer-on-top contributions to National Insurance and pension schemes. The Little Ones Payroll Service can help with this

Regional Disparities: London vs. the Rest of the UK

One of the biggest factors concerning the Nanny hiring cost is the location. London, being the heart and the capital of Great Britain, has a much higher cost of living which directly affects salaries. Therefore, families in London could be in a situation where they have to bear more expenses to employ skilled and licensed Nannies.

The London weighting is applied by many employers with a national footprint for their employees based in London to account for the higher cost of living in the capital.

However, for regions outside of London, the financial environment can be quite unpredictable. The average cost of living is comparatively low, which can influence the Nanny’s wages - making them relatively less expensive.

Families outside of London may find the national average to be a more realistic figure for their determination of the salary for hiring a Nanny.

What is the total cost of hiring a nanny?

To get a realistic estimate of the actual cost of employing Nannies or Housekeepers, it is worthwhile to go beyond the net salary.

The overall cost to the employer is made up of:

  • Gross salary
  • Employer’s National Insurance contribution
  • Employer’s pension contribution

The Payroll Team at Little Ones can provide you with a detailed total cost analysis and salary breakdown for the tax year ahead based on your employee’s current salary.

HMRC also recommends that all employers obtain Employer’s Liability Insurance. If you want to learn more about this, a member of the Little Ones Payroll team can help you.

The Nanny’s gross salary will be the salary agreed upon before any relevant deductions for income tax, the employee’s national insurance contributions and the employee’s pension contribution. There may also be other deductions such as student loans.

Employer's National Insurance contributions include obligatory payments toward benefits received by the employee that differ from the individual contributions paid by employees. The figure is dependent on the employee's insurance category for National Insurance.

An employed Nanny or Housekeeper is also entitled to a workplace pension scheme. The employer is required to contribute 3% of pensionable earnings. Please note that the employee will also contribute towards their pension (4% of pensionable earnings).

The employee’s contribution will be automatically deducted from their salary. The Payroll provider will then be responsible for reconciling the pension payments from the employer and employee via the workplace pension account.

The Little Ones Payroll Service expertly assists with workplace pension account management. They are on hand to help employers understand the complex rules and regulations and also manage the workplace pension account on your behalf, thereby simplifying the process.

Legal and Regulatory Considerations

Like any employer, families employing a Nanny need to comply with the UK's employment laws and related regulations.

Key legal considerations include:

  • National Insurance Contributions: The companies get further obligation to finance National Insurance payments as regards the nannies. Understanding the current rates and ensuring compliance with them is important.
  • Pension Scheme Contributions: Following an update to the Pensions Act in 2008, all employers are now required by law to provide a workplace pension scheme for staff, including nannies, who meet the eligibility criteria - if the employee is over 22 years old (under state pension age) and earns over £833 per month the employee will be 'automatically enrolled'.
  • Income Tax Deductions: The employer and the Nanny must understand their income tax liabilities that are defined by the tax laws. The employer must deduct income tax from the Nanny’s salary and submit it to the HMRC.
  • Employment Contracts: Making the employment relationship official with a written contract is compulsory as a matter of law. This document should strive to cover basic terms like salary, working hours, duties, and any extra benefits.

Failure to comply with these legal obligations can result in financial penalties and reputational damage for both parties.

What are the salaries of domestic staff in the UK?

The job of the Nanny, Nanny-housekeeper, Housekeeper or Au Pair selection is rather complex and costly. You may face different questions about how to find a suitable candidate, calculate an appropriate salary and handle agency fees.

As a premium Nanny and domestic staffing agency, our prices reflect the premium nature of our candidates. We are committed to providing staff with a minimum of 2 years of professional experience, a DBS Check and a First Aid certificate, if applicable. Their experience is verified with a minimum of two previous employers.

Position Title Salary
Junior Live-in Nanny £300 - £600 gross per week
Live-in Nanny £600 - £900 gross per week
Daily Nanny £15 - £20 gross per hour
Maternity Nurse £20 - £25 gross per hour
£250 - £300 gross per day
Part-time Nanny £15 - £18 gross per hour
After-school Nanny £15 - £18 gross per hour
Au Pair - UK £250 - £300 gross per week
Junior Nanny - UK £300 - £400 gross per week
Junior Live-in Nanny Housekeeper £300 - £500 gross per week
Live-in Nanny Housekeeper £600 - £800 gross per week
Live-out Nanny Housekeeper £13 - £21 gross per hour
Junior Live-in Housekeeper £300 - £600 gross per week
Live-in Housekeeper £600 - £800 gross per week
Live-out Housekeeper £13 - £20 gross per hour
Temporary Live-in Nanny £15 - £18 gross per hour
£600 - 800 gross per week
Temporary Live-out Nanny £15 - £20 gross per hour
Temporary Live-in Maternity Nurse - UK / Overseas £300 - £500 gross per day
Live-in Governess/ Nanny-PA - Overseas £6,000 - £8,000 gross per month
Live-in Nanny - Overseas Europe £3,000 - £6,000 gross per month
Live-in Nanny - Overseas Non-Europe £4,000 - £7,000 gross per month
Live-in Housekeeper - Overseas £3,000 - £4,000 gross per month
Live-in Nanny-Housekeeper - Overseas £3,000 - £5,000 gross per month
Live-in Rota Nanny - Overseas £1,000 - £1,500 gross per week
Live-in Domestic Couple - UK £1,200 - £2,000 gross per week
Live-out Domestic Couple - UK £30 - £40 gross per hour
Live-in Domestic Couple - Overseas £1,400 - £2,500 gross per week

Please remember that salary expectations can differ when specific criteria like overtime, location, benefits or leave period and the candidate’s qualifications and experience are discussed.

Practical Considerations - Beyond the Numbers

Although the financial aspects of hiring a Nanny are undeniably important, factual considerations weigh in too. They shape the entire experience for all the parties involved - the family and the Nanny included.

Families should carefully consider factors such as:

  • Accommodation: If a Nanny is provided with housing, either within the family home or in a different housing, such a benefit will be counted as a part of their overall compensation package. Families must consider the extra expenses.
  • Working Hours: An important aspect of a Nanny's salary is the number of working hours stipulated by the employer, including any overtime requirements. Families and nannies should have clear working hours expectations to prevent disagreements.
  • Additional Benefits: Families have the prerogative to create comprehensive benefits packages including paid days off, health and medical coverage as well as professional development schemes. These benefits will act as an incentive to gain and maintain quality Nanny workers.
  • Trial Periods: Some families choose to use a probationary period which can be for the first three months or the first year before actually employing a caregiver. In this period, there will be the opportunity for both parties to evaluate the match and find out whether the working relationship is a suitable claim.
  • Communication and Feedback: Maintain smooth communication and offer positive reinforcement to develop a cooperative ambience at work. An open parent and Nanny discussion to clear up any possible misunderstandings will help in creating a healthy and safe environment for the child.

Families should consider both practical and financial aspects while creating a complete set of employment parameters that would meet their particular goals and standards.

The cost of hiring a Nanny in the UK in 2024/25 will need a thorough and thoughtful cost analysis. The family must handle an intricate spectrum of factors that encompass regional disparities, qualifications, economic determinants, legal responsibilities and practical realities. The Little Ones Payroll Service can help with all of this, making the process easy and seamless.

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