Is a nanny about 2.6 times the cost of a childminder?

[nannynick]

I just did a post on my blog as I had calculated that in my area, a nanny is about 2.6 times the cost of a childminder.

For example in my area a childminder often charges £5 per hour? so £5 x 2.6 = £13    I think I cost my employer around £23,000 a year in terms of Gross salary and Employers NI.  Then there are the additional costs such as Mileage payments, outings/activities, food ? possibly another £4,000.  I do a 40 hour week, so 2080 hours per year.  So £13 x 2080 = £27040, which is close to my Gross salary, Employers NI plus estimated additional costs.

What do you think?

If you take the cost of a childminder in your area and multiply it by 2.6, is the result similar to the cost of a nanny?

How far do you travel to clients? Because if you're prepared to travel out of your immediate area, I think you should look at the charges those childminders charge, too.
For my area £5 is a bargain and would probably mean meals and extras being charged.

Childminders here are about £3.50-£4 an hour, gross nanny wage is around £7-£10 an hour. Not sure what that gross wage would translate to in actual cost though.

Maybe for a live-out nanny. But I think the ration is quite a bit lower for live-in. Childminders in my area are more like £7 per hour. 10 hours a day for five days a week is £350. I can get an entry level live-in nanny for about £350 gross. I have to add on food, bills, expenses, etc. But, it won't even double the price. So, as soon as you have 2 young children, the nanny is more attractive financially.

Currently I have an au pair / childminder combination which is cheaper than a nanny when you consider it virtually eliminates my tax responsibility. It's a bit more complicated for me. But, the savings is worth the extra hassle.

I obviously meant ratio, not ration.

Depends on area i guess.
Up north- Childminder £2.50-£4 an hour Vs Nanny £7-£10 an hour

Yes I meant a live-out nanny, so someone working in the same area in which they live - say not commuting further than 10 miles.

Live-in ratio I expect may be even harder to calculate as there is the cost of accomodation which is hard to factor.

Not having employed a nanny, I don't know about whether the cost changes with more than one child, Do nannies charge more for looking after more children? Childminders sometimes give discounts for more than one child (ours did) but I wonder how the costs are affected by number of children you have?

Nannies don't charge, they are just paid a wage by their employer. Some employers offer a pay rise or bonus on the birth of a subsequent child, but the number of children doesn't tend to effect wages.

Not all childminders give a sibling discount, you are lucky if they do. Nannies are a per-family cost, not per child... thus a nanny can be a lower cost option if a family has say 3 children all of whom are young. Gets harder to compare once school aged, as a childminder may only charge for before and after school care for a school aged child, though would be more during school holidays.

WeLoveHaribo > Childminder £2.50-£4 an hour Vs Nanny £7-£10 an hour

So if say a childminder averages at £3 an hour, vs Nanny at £8 an hour (is that Net or Gross?... assume Net for now)
Lets say a 50 hour week:
Childminder: £3 x 50 = £150 a week x 52.105 = £7816
Nanny: £8 x 50 = £400, Convert to Gross £522 = £27199 + EmpNI 2777 = £29976, +£4k extras = £33976 Hmm, that doesn't work... it's about 4.34 multiplier.
Nanny: £8 gross x 50 = £400, Cost to employer: 22759, plus £4k = £26759
So around 3.5 x cost of childminder.

Does not look like this works. Oh well... maybe this needs more thought.

I wonder if anyone has accurate figures for the cost of a nanny in their area and cost of a childminder... if so, what was the cost of a nanny as a multiplier... is it 2.6 x the cost, 3x the cost, 4x the cost?

NannyNick - are you on a one man mission to put all parents off of thinking about a nanny?

Of course not ChippingIn. A nanny is a viable option for parents who have 3 or more children, or if they have less children and need childcare outside of the usual hours which other types of childcare provide.

Parents considering a nanny I feel need to be able to calculate what sort of cost is involved, so they can make an educated choice as to if employing a nanny is the best option for their family. Some nannies will tell parents a Net salary they want and will ignore that it will cost the family a lot more than that to employ them. If parents were to just think about a nanny being the cost of the nannies Net salary, they would get quite a shock once they start employing a nanny.

My view is that a childminder is always going to be cheaper than a nanny if the family have 2 or less children. Nannies are viable once there are 3 or more children involved.

Childminders in my area are £6-£7 per hour per child. An entry level nanny is about £8 - £10 per hour (gross), for all the children. So I would say as soon as that second child arrives a nanny makes more sense financially, especially if you require long hours, overnight care, or any of the other million points of flexibility which a nanny offers.

I imagine if you had two kids and organised a nanny share with someone else who also had 2 kids, you'd save quite a lot over the childminder option.

Of course, not all areas have childminder rates as high as mine. So, it will vary. We have 3 children and there's no way I would pay £21 per hour for a childminder. So I would say a nanny is a very attractive option.

What's the point in not talking about nanny costs anyway - they are what they are. People will work it out - hopefully not AFTER they've wasted a nanny's time on an interview, only to realise they can't afford it anyway.

I keep hearing about these live in nannies on GBP 350 gross but for us they were always like a unicorn - often spoken of, never seen.

You've never seen a unicorn?

no

Just kidding

But, live-in nannies for £350 gross most certainly do exist. (but are probably not found through agencies, and come with little experience and require a fair amount of on-the-job training) I think it works for people on a budget. But those who can afford agency fees and want someone to hit the ground running do probably pay a premium for that service.

I know I know!!!

Well, I would have definitely done that if one had shaken out. Even the very inexperienced ones wanted at least seven net per hour.

Hilarious live outs too - one wanting ten net with no childcare qualifications or experience or even so much as a first aid cert.

We're past full time nannies now as both DDs will be in school (even my 3 yr old!!!) from September. I have to say I'm relieved mostly although settling in a new au pair for three months every year might become wearing I fear. They just start getting really comfortable and settled...then they're off.

Nick - it's fine to say you need to consider x, y & z if you are looking at employing a nanny, but to say it will cost you 2.6x the amount of a childminder isn't correct (as you now know), nor helpful (the factor will never be a constant).

A lot of people already think employing a nanny is 'out of their reach' when that's not always the case. Of course a lot also think it's cheaper than they thought it would be - because they aren't considering all the other things... but I think people need a list of things they need to think about, but that's all really... Oh that and the government to wake up to the fact that it's ridiculous expecting parents to pay a gross wage out of their net wage.

Chipping, I couldn't agree with you more about how ludicrous it is for parents to pay a nanny's gross wage out of their own net wage. Eg a partnership or a limited company (as other examples of employers) would be able to offset one against the other. I can't think of many other categgories of employers, other than parenst employing nannies, who are treated for tax in this way. (I am not saying that nannies shouldn't agree a gross wage, by the way.)

Nick, I live in Bromley, and childminders here charge £4 or £4.50 or more an hour. Our previous nanny was on an hourly rate of £8.50 wen she started with us (part qualified, experienced - her previous employers paid her £8.17/hour), which went up after 6 months with us to £9. Our current nanny (very experienced and wonderful) is on £10.85/hour (her previous employers paid her £12/hour).

All a bit of a mix, really. And I suppose for a proper comparison, you need to compare like for like eg a childminder with X years experience against a nanny with the same years' experience.

"...and the government to wake up to the fact that it's ridiculous expecting parents to pay a gross wage out of their net wage."

Absolutely!
(round of applause)^

If you are going to put a ratio onto the cost difference, you do probably need a range. I haven't really done the math, but I think that in some areas, you will find a live-in nanny is cheaper than a childminder for only one child.