The Real cost of a Nanny

I think many women thought like that until recently, but I am starting to see so many women who have done exactly that being laid off, so they have effectively been subsidising their own work, owe money now, and now have no obvious means of recouping that investment. Nothing comes with guarantees in life.

Good point Killer Heels! When I first started as a nanny this was how most career mums thought and knew the cost of childcare was a means to an end.

Nowhere in the Chapter 2 link does it discuss the overall contribution to the economy of female wage earners claiming childcare vouchers. Bank of England reports invariably stress the hugely positive effect on economic growth of women being retained in the workplace, but in this policy paper all we see are discussions about the notional cost, based on the assumption that these earners are not generating more to the economy than the cost of providing childcare tax relief.

This country is run by a bunch of innumerate idiots IMVHO.

Chrissie, none of this is news to anyone who has been forking out for childcare. I don't know why you seem to think few other mothers have had the brains to work out that their childcare costs in some cases are more than they get paid. But there is a BIG payoff to staying in work and crucifying yourself with childcare costs, which is that children aren't little for long, and if you stay in the workforce you can continue travelling up the career ladder.

As many, many qualified professional women have discovered, if you become a SAHM for any length of time, you can generally kiss your career, or indeed any high paying job, goodbye. High childcare costs in teh short term are the price we pay for keeping open long term career choices and financial benefit.

Parents, if first timers, I find it easier to excuse than experienced nannies or agencies. They've probably read that nannies talk net do have painstakingly calculated everything on a net basis OR are being led down the garden path by a few nannies who've quoted net/other employers who talk about their nannies' net salaries and are utterly confused because they can't compare the prices different candidates put on themselves.

However parents can be educated with a few simple yet persuasive arguments mostly about tax codes and total cost.

What bugs me is when employers talk net and then decide they can't afford gross.

I find it is often the parents who want to pay in net and I have decided that in my next job I will stick to my guns and negotiate agross salary. I missed out on the increased tax allowance this year because my employer payes me in net. but I can assure all posters that I always make sure that my employer is paying the required paye on top of my net wage and insist they supply P.60s at the end of each tax year and P.45s when I leave.

If someone is taking cash in hand they are unlikely to tell everyone and make it traceable anyway. But there is a difference between being payed cash and declaring it and being paid cash in hand on the side.

There's an interesting epetition to increase the amount of money you can spend on childcare - from £55 to £75 pw - not enough, but a start at least...

Why not sign it??
epetitions.direct.gov.uk/petitions/31669

Yes, all of my childcare costs (which are incurred for th sole purpose of going to work) should be paid before my ni and tax are calculated on the remaining. The government won't do this because they think they need my money more than I do. Greedy bastards. Resistance is futile, sadly. I suppose there should be some level of cap. But the £126 I am entitled to is stupid. It should be about £2000 per month.

It's no wonder really that people choose tax evasion. I know several people who pay their nanny cash... And several who are above board.

Ah, ok, I see. Thank fraktal. I just couldn't get my head around the phrasing.

I imagine it would need to be something like your gross income - childcare costs = amount you then pay tax and NI on.

It simply wouldn't be cost effective and it doesn't work with the PAYE system very well. I work in a system where at the end of the year I complete my tax return, put down what I spend on a nanny or CM and then our tax bill is reduced by 50% of the amount spent (up to a certain threshold).

It just isn't practical in the UK.

When you say gross income, do you mean the portion of your gross income that you pay in tax?

With no limit ChrissieLC? Just all childcare costs, no matter what they are?

*when you say

Sorry, I'm sure I'm being dim, but what you say you should be able to pay childcare out of your gross salary, do you mean you think it should be tax deductible?

*guarenteed

There are a lot of jobs where you need to be in a certain area of the country to work, and nannying is one of them. If you want good money and almost gaurenteed work, you need to be in London or surrounding areas. If you don't want to/can't live in London then you have the choice of working for less/trying harder to get a job/having less choice of job or doing something else. Pretty much all jobs are paid less outside of London, that's not a nanny or even a childcare problem.

They would probably be wanting to bring their baby with them though - so may be why the pay level they desire is low. Also, they are 22 so pay could not be lower than NMW.

I don't know, every nanny I know of is under paye and everything declared.
I always negotiate net as that's what the agencies release figure in, but I am actually paid gross as all my tax, ni etc is paid through paye by employers.

As someone rightly said, the majority of nannies do work for wealthy people in wealthy areas. Even with a commute of some kind it is expensive to live in those areas. Nannies often work from very early until late, and I personally wouldn't want another hours commute on top if I'm leaving at 11pm, and back at 7am.

As a professional nanny I also spend a fair amount of time and money outside work hours making sure I am up to date and gaining new qualifications

Paying peanuts isn't going to help anyone

That option is discussed extensively in Chapter 2, including HM Treasury's view (that it would cost at least £300m a year and could not therefore be justified) and a reference to some of the many campaigns over the years including Teresa Gorman's private members bill, the campaign by the accounting body ACCA etc.

If anyone is thinking of starting a campaign they would be well advised to read it and follow up the references to understand what others have done before.