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

Can someone help me understand the cost of nannies post the pension

27 replies

flip2010 · 28/02/2015 12:03

What are the options for parents who have nannies full time ..

The cost of a full time nanny can be c.£30k+/- gross - And this is before the parent has to pay their own tax and NI on their own salary!

Now if I understand correctly parents will also have to contribute up to 3% pension. That is c.£1k extra p.a. Is it deductible?

Are there any rebates or other mechanism to reduce the overall cost? In many other European countries childcare is partly deductible , however parents in the UK do not have the ability to deduct any of the cost and are now faced with yet another expense.

I would be grateful if someone could explain to me what will be the impact of the new pension and whether there are any means of reducing the overall childcare cost.

OP posts:
Are your children’s vaccines up to date?
Set a reminder
Cindy34 · 28/02/2015 12:29

There is the tax-free childcare scheme which starts later this year and is up to £2000 per child. That works as you pay into an account £8000, Government tops up by £2000.

If you had 3 children who all qualified for the scheme then in theory you could pay in £24,000 and have £6000 added by Government.
That entire £30,000 has to be used to pay for the nannies Gross salary.

Full scheme details still not available, so it is not yet clear how it will work with nannies as it seems setup currently for situations where there is an amount paid for childcare on a per child basis.
It is also being phased in, so whilst under 5's should qualify from the start, older children will not. It is also only up to the September following the child's 11th Birthday, so not great if you have a summer born child.

Cindy34 · 28/02/2015 12:24

Deductible from what?

As I understand it, it works similar to National Insurance where you have one part from the employee and one part from the employer.

The nanny has their pension contribution deducted from their gross salary.
The employer pays the employers contribution.

Swipe left for the next trending thread