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Recruiting a nanny - help!(10 Posts)
Hoping for a bit of help and advice.
I'm a newly single mum to 2 beautiful babies aged 7 months and 3.5. I'm returning to work in January for 4 days a week an require a nanny to help out for 10 hours a day with childcare and light domestic duties. We live in Sutton Coldfield
Could you advise me on how to find a nanny, what rates of pay, do I have to pay their tax and NI and what type of thing I can expect from a nanny. Also how do I claim child tax credits for a nanny?
Just trying to work out if its an option for us.
Some of those questions have variable answers. Let's deal with the easy ones first.
Do you have to pay tax/NI? Yes. You nanny is an employee. You should negotiate a gross wage which includes the nanny's deductions and then there will be employer's NI on top.
How do you claim CTCs? Your nanny will need to be registered with OFSTED. They will then give you their identifier which you can use to claim.
Rates. This will depend on qualifications and experience. Your location works in your favour as nanny wages in the Midlands aren't too high. For someone with a qualification and little/no experience you're looking around £7gross. A more experienced nanny would be £9/10 gross. An experienced nanny with their own child coming along would be around £8gross. Remember though that this cost will be the same when your DC1 starts school and nannies can't deliver funded hours.
Duties. A nanny will do pretty much everything related to your DC, organise activities, cook their meals, do their laundry, tidy up after them, run errands etc. Sone will accept additional housekeeping, some won't.
Some things/ costs you may not have though of:
A nanny is a 52weeks of the year commitment. You need to factor in their holiday time.
You will need to budget for food, heating and lighting, a small kitty for expenses, car insurance or mileage, potentially the cost of renewing OFSTED registration, potentially a company to sort payroll for you.
There's some useful info here
If you can find a nanny at £9 gross an hour:
£9 x 10 hours x 4 days = £360 Gross per week, £18,771 per year
Employers NI = £1559 per year (this figure will change as Employers NI rates change in April following The Budget) MrAnchovy's PAYE Calculator is what I used to get this figure for 2012/13 taxyear.
Weekly Expenses Kitty (for activities/outings): £5 per day perhaps. The more Based on a 48 week working year, nanny working 4 days per week, £5 x 48 weeks x 4 days= £960 total.
Nannies Travelling Costs Whilst On Duty: If your nanny uses their own car, then employers would usually reimburse the cost at £0.45 per mile (this is known as the Approved Mileage Rate). How many miles your nanny would do will vary. Consider the usual mileage they would do to take children to toddler group, other outings. I would say that I do an average of 3000 miles a year (nannying 4 days per week in a semi-rural location). Start recording the mileage you do in your car during the week, you may be quite surprised how quickly the mileage adds up even if you are just going to the local shops, library, playground, woods, PYO farm etc.
For a 4 day per week nanny I suggest factoring in at least 100 miles a week so £45 per week, £2160 per year (48 weeks).
While your nanny is on duty, you give them food and drink. Nannies dont really get a lunch hour, cant leave your children home alone. So food is seen as a sort of perk in compensation for working without a break. How much does that add to your weekly food budget I'm not sure. Nanny will eat with the children, so eat the same thing. If nanny wants something different, I feel nanny should be buying that themselves. So increase in food bill, extra £3 a day maybe? Heating/Light will also be used more as nanny is around during some of the day, so another few pounds. If comparing with a childminder/nursery, lights wouldn't be on at your home, heating may also be set low. If comparing with you staying at home, then there wont really be much of a difference at all. There is also some additional wear and tear on the property. Shall we lump all these types of cost together say £8 per working day. Suppose you could include cost of Employers Insurance in that (it is usually part of your home contents cover, check your policy). So 4 days x £8 = £32. 48 weeks x £32 = £1536
Payroll Admin: Use a payroll company, typical cost £135 per year.
So your costs:
Employers NI: £1559
Payroll Admin: £135
Those are costs which tax credits will take into account, so total for those: £20465
Add in those, gives you £25121
Max tax credits claim (see WTC5) with 2 children is 70% of £300, so £210 a week.
Your average weekly childcare cost for tax credits purposes is £20465/52 = £393.56
That is above the max claim £300, so assuming you get 70%, then you get £210 a week in childcare tax credit towards the cost, so £10920 a year.
So total cost: £25121, you may get £10920, leaving you £14201 to pay yourself from your take home pay. You will need to budget more to this, as things do change, so costs can go up.
Can't beat these too, NoMorePain. I'll just add that everything that they say is true and they're experts!
Very helpful responses for me too! And I'm in the midlands so costs are comparable. At the risk of hijacking the thread would any of these costs vary other than proportionally for a two day week?
poocatcherchampion - Employers NI would not vary proportionally, it is calculated in a more complex manner, so use the PAYE Calculator to get a feel for the figure for that based on the salary you are offering your nanny.
The payroll admin fee is fixed cost, won't vary on number of days nanny works. It will vary perhaps on pay frequency, such as if weekly pay rather than monthly, the admin fee may be higher.
The big cost is the nannies salary itself, so agreeing a lower annual salary (or hourly pay) will help lower costs. However I feel that nanny salaries for an experienced nanny, do not vary that much around the country, except in large cities. So someone experienced could well be wanting £9-£11 gross an hour, whereas someone in their first job having left college may be happy with £7-8.
Wow thanks for all of the brilliant advice.
Just need to find a suitable nanny now! Can you offer any advice on how to find one? Would like to avoid an agency if possible!
If you want to avoid an agency you need to put an ad on Gumtree, nannyjob, childcare.co.uk, your local netmums childcare board, greataupair (it says APs but it also has nannies) etc and you can also contact candidates through those sites. Also ask around - word of mouth can be a great way to find potential nannies.
Before you do that you need to be absolutely certain what you want, what salary, what you absolutely need the nanny to have etc because a) people will flick through your ad and if it doesn't have enough info they'll ignore and b) you'll get a lot of applications so you need a quick way to cut them down to ones who are real possibilities. For starters you need someone who is already OFSTED registered so any applicants who clearly aren't registered aren't worth your time. Registration can take a while to process and if you're relying on tax credits you may not have that much time.
Once you've found good candidates you'll need to interview - there are lots of good questions if you search this section, making sure to check paperwork and check references. Nannies may provide written references at interview but always get contact details and follow up what was said.
Then once you've made an offer you'll need to draw up a contract, which a payroll company may well be able to help with, and organise settling in
Make sure you can afford it. Tax credits may get paid late but that is not an excuse for you to not pay your nanny, so have a way of paying nanny without the taxcredits help - a months salary for example.
Going by my calculations, adding in say another 12000 for your living costs (those could be a lot higher) you would need a salary of around 32000 maybe more to get the take home pay needed.
At that sort of salary do you get taxcredits - I don't know. What is the upper income limit for getting 70% childcare tax credit?
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