My grandparents babysit for two or three hours once a week for us. We are well off and like buying them expensive/generous birthday and Christmas presents, but couldn’t imagine giving them 10-20 quid for looking after their own grandchild for a couple of hours. I guess if they were really hard up, but OP says sister is earning well....
I think some people responding, and the OP, are confused. In the above example, the grandparents (adults) are not ‘hard up’ and will have, in their turn, been responsible for babysitting younger family members before through the natural process of inter-generational childcare.
The niece in question is not an adult, is therefore ‘hard up’ (& will need to pay the bus fare for the privilege too out of her £0 wages), and isn’t a parent or grandparent or even an aunt - she’s being asked to ‘act up’ into a responsible role.
I think the problem is that you are seeing this babysitting as an extension of something being done by your sister rather than a job being done by your niece.
^^ what Gnome said.
It’s got nothing to do with OP’s sister other than not wanting her niece to be taken advantage of (which, reading between the lines, could be an issue - from the OP:
my sister earns about 5 times more than I do! This isnt about paying money, more about the constant focus on money and tone from sister like she'll be doing me massive favour
It’s entirely possible that the alternative point of view is “my sister’s always focusing on money because I regularly try to get out of paying my way because I hardly earn anything and she earns loads and she’s so stingy not letting me off paying for stuff when she can well afford it”
Pay. The. Teenager.