Active discussions

Please or to access all these features

Talk
Paid childcare

Discuss everything related to paid childcare here, including childminders, nannies, nurseries and au pairs.

Original poster

The Real cost of a Nanny

54 replies

ChrissieLC · 09/05/2012 13:31

Have you worked it out?

I am an IFA and an employer of a nanny. I have come across so many people that are paying for nurserys nannies etc and not really realising how much they are forking out to go to work, and more worringly alot of them are actually working at a loss without realising!!

The HMRC is clamping down on nanies getting paid part in cash, so those days are over if you are still doing that, however the industry will take a while to catch up with this and whilst net salarys are still in contracts nannies will be expecting the same pay. One day it will be gross salaries and salaries will have to come down for nannys as people will cotton on to the fact they can't pay cash anymore...not even for housework duties whilst the kids are at school.

Ok so real cost. Well nanny costs vary of course. In my area £7 net per hour is a good wage, in london more like £9 or £10 (if you are paying more than that look o get a nanny to commute from places like bedfordshire , essex etc as £9nph is a very good wage for them and there are 8 nannies for every job)

So say on averge you pay £450 net per week for your nanny.

That actually amounts to £680 you pay out of your own net wage.

Plus add on petrol costs of the nanny, agency costs, ofstead registration costs, payroll costs, redundancy or maternity costs and your own cost of going to work (travel, suits etc). Well to clear that cost of the nanny with no profit for yourself you will need to be earning £45 to £50K per year to just cover the cost. So whats left after that is profit for you (after of course you pay your 40%)

So say you are earning £70K a year. Chances are all you are getting in your pocket for all that hard work is about £12k a year.

Is it worth it?

I do actually have a nanny myself, however worked out that working 3 days a week actually makes me better off than working 5 days as I put everything through payroll. But not everyone has the option of working less days.

Such a shame we cant pay for childcare out of our gross wage. Once cash in hand has gone, expect nanny wages to drop and nanny jobs to be fewer hours. It's time the government saw they are killing off 2 people who would be happy to work full time by not placing incentives for those who have to pay childcare.

OP posts:
Are your children’s vaccines up to date?
Set a reminder
Original poster
ChrissieLC · 09/05/2012 14:06

It is an offence but it appears that a very large proportion of nannies are being paid through cash so this will affect the market when they are forced to stop. I can understand why it has been going on, as with only £243 per month childcare vouchers that can be done out of the gross wage it is no wonder some people are looking at ways to reduce the costs.

The career thing is why I continue to work.

It is important however that people realise how much it is costing them as I have come across people that would not be working if they had known their childcare was costing them more than they are bringing in. They are genuinely surprised when they work it out.

At that point the joint earnings are somewhat irrelevant unless the person was so desperate not to loose their career that they work at a loss and have their kids looked after by someone else.

if this country want mums back at work, they really need to help out the tax side of childcare to reduce costs. I am not critising this particular government (who I am still voting for for lots of other reasons), but in general it has not been looked at since the £243pm was set and it needs to be

OP posts:
5318008 · 09/05/2012 13:55

Well if not all earnings are declared through payroll then that is an offence anyway, surely ? Not sure why this is an issue tbh

Anyway, moving on to other points. A woman, living wirh an earning partner, why should childcare costs be calced out of her earnings rather than joint income?

And tben there's the deferred gratification thing - suck up large childcare costs, initially, continue accelerating career, reap benefits when children go to school

Original poster
ChrissieLC · 09/05/2012 13:43

Not necessarily, most of the nannies I know have had jobs where part of their pay was through payroll and part of it was cash , ie only part of their earnings were declared.

Some employers seem to think its ok to pay cash for housework whilst the kids are at school etc you see.

Bascially if you hand over any money to the nanny that is not declared through payroll then the HMRC will be after you! Or so they say given recent articles in the FT and BBC news etc

OP posts:
5318008 · 09/05/2012 13:36

Um a bit confused

I understand cash in hand to mean no paye operated, yes ?