Nanny question - ballpark cost for a baby 3 days and 4y old 3 after-schools?

[befuzzled]

That's it really. I have always used Nurseries and have no idea what nannies charge. I have just got the bill for my baby starting nursery 3 days a week while I am working and the 4y old going there for 3 afternoons from 4-6 after school and it is £1100 odd. I am wondering if a nanny might be cheaper? We are in Surrey. Any ideas?

Ballpark, £9-£13 an hour maybe.

I don't know about Surrey, but around here it's £8.50 to £14 gross per hour.

Yes, and you've got to remember that on top of the gross wage there is employers NI and costs/expenses like food, mileage, payroll company if you use one.

If you find a young, newly qualified/straight from nursery nanny you could probably pay more like £7 an hour gross though.

probably not much cheaper if it all... as you pay per family, not per child.

BUT an in-experianced, perhaps younger nanny might not be much more, or even about the same amount.....

BUT you will then have more gas / electric costs (when they are home all day), and will need to pay a few £s a week for toddler groups etc, + i assume nursery provide food where as, you will need t provide food for your children and nanny.

Nothing extravagant, beans on toast / jacket potatoe and beans / tuna sandwich etc, and maybe a yogurt / piece of fruit for nanny.
also unless you provide a car you will need to pay nanny 45p per mile if she used hers.
(although if lots to do in walking distance you could say 1 local trip per week)
You need to pay her holiday (normal for her to choose 2 weeks, you to choose 2 weeks and bank hols off, but all negotiable between you and nanny)
If nanny is sick then you suddenly have no childcare (But i think generally a nanny is sick for far less days than 2 children)

then theres the plus side.... if either of your children are sick nanny will still look after them... you wont have to pay extra childcare for your eldest in the school holidays.

Other bonus's.... nanny should do some of the childrens laundry (as a 3 day nanny you wouldnt expect her to do it all as you might a full time nanny) but no reason why she shouldnt do the childrens beds once a week and do a couple of kids loads, and iron if necessary, and put away.
Nanny can cook fresh yummy food from scratch.... and might well make enough for a few portions in the freezer too.
Many nannies dont mind being asked to bake a cake or batch of biscuits or something... perhaps if you have guests "tomorrow"
Nanny can pick you up bread and milk etc, dry cleaning / prescription / card for granny etc etc so 1 less thing for you to fit in your busy working day.
Its not unreasonable to ask nanny to stay in (occasional) for a deliverys / gas man etc etc, so again 1 less thing to fit into your free time.
A nanny shouldnt be expected to clean your house but should leave it as clean and tidy as it is when she arrives
you dont have to get all the children up and out the house, taking away some of the morning stress.

So its worth thinking about....
also a nanny with own child may charge a bit less....

there are pro's and cons, and you might not save much, but might have an easier life if you use a nanny than a nursery

A nanny is unlikely to be cheaper, assuming you are talking 5 days per week, all year round.

To do a calculation I need some figures... for now I will guess them:

Start time: 7am Finish Time: 6pm Days: Monday-Friday
Location: Surrey (I will presume you not in Greater London, so not somewhere like Richmond or closer to London)

Hours per day: 11 Hours per week: 55
Nanny typical gross salary: £10.50 per hour (you may find someone less than this, though it depends on who is available and the experience level you are looking for... so range could be anywhere from £7-£12)

Nannies gross annual salary: £30,113
Employers NI (2011/12 tax year): £3,180

Payroll admin cost: Varies, lets say £130

Weekly expenses kitty (for activities/outings) - lets say £5 per day, so let's call it 240 working days per year - nanny will get holiday. Kitty = £1200

On top of that you may pay for some more costly activities, such as swimming lessons, music lessons and the such-like... but those are of course very much optional and if you do them you would probably be doing them regardless of having a nanny or not.

So running total so far £34,623

Nannies travelling costs whilst on duty will vary from situation to situation. If nanny uses their own car, then employers may reimburse the cost at £0.45 per mile (this is known as the Approved Mileage Rate).

How many miles your nanny does will vary. I do quite a lot, around 4000 miles a year (I work in a small village in West Surrey, near Berkshire border, so not that rural but local places we visit can easily be a 20-30 mile round trip) so a cost of £1800 a year if at £0.45 per mile.
I don't know how much travelling your nanny would do, so lets add £1500 for travel (which may or may not be reasonable depending on the circumstances), pushing our running total to £36,123

While your nanny is on duty, you give them food and drink. Nannies don't really get a lunch hour, can't leave your children home alone. So food is seen as a sort of perk in compensation for working without a break. How much does that add to your weekly food budget... I'm not sure. Nanny will eat with the children, so eat the same thing. If nanny wants something different, I feel nanny should be buying that themselves. So increase in food bill, extra £3 a day maybe? Heating/Light will also be used more as nanny is around during some of the day, so another few pounds. If comparing with a childminder/nursery, lights wouldn't be on at your home, heating may also be set low.
There is also some additional wear and tear on the property. Shall we lump all these types of cost together... say £2000 a year (about £8.33 per working day). Suppose you could include cost of Employers Insurance in that (as it is part of the home contents cover usually).

So £38,123

Do you want to round up or down... lets go down this time... £38,000 a year, £3167 a month.

If you could get a nanny for £7 per hour, based on the same calculations it would be about £10,000 or so a year less.

You can use the PAYE calculator to have a play with the figures for calculating the annual salary part plus employers NI.
It's then a matter of if you feel the other costs I've projected are what you would see as being reasonable estimates.

Oh silly me... didn't spot it was only 3 days. It will make a difference:
At 10.50 per hour, 11 hour days:
Gross pay: £18068, EmpNI £1517 Payroll £130
Kitty: 144 *5 = £720
Mileage: unknown, guess £900
Misc costs: £1150 (heat, light, food, etc)
£22,485 round up to £22,500, £1875 per month.

Thanks! And that would cover both children on all 3 days? Including picking one up from school? In wish case I think it is gonna still be a bit cheaper to use a nursery, amazingly.

How does it work with tax Ni etc if you are only using one part time, live out?

Childminders around here (east midlands) cost £3.50 per hour for a baby with the school pick up you would be looking at £50 per day so that would be £600 per month , you would then have to add in school holiday costs and organise something for the 4 weeks the childminder has off for her own holidays but for half the price it's surely got to be worth a look?

Nannies are a per family cost, does not make a difference with number of children. Would include taking, collecting from school... taking children on outings all that sort of thing.

If they have another job you have to operate PAYE.
If they are paid a certain amount or more (for 2011/12 it's £102 a week - see here, you have to operate PAYE.
Putting it simply, you have to operate PAYE. Thus why I included the calculation from the PAYE calculator for the Employers NI, plus also a typical cost for a nanny payroll company (though you could do it yourself).

befuzzled I think Nannynick is very much over estimating the costs, albeit all very well worked out. Our nanny did 3 days a week and we paid approx £9 per hour gross, PAYE.

The costs came to no where near his estimate, in fact not even £1000 a month. Based on the costs you've outlined for your nursery, I'd say that a nanny would be a cheaper and more practical option.

The companies who organise payroll charge less than £10 per month, and will sort out all your tax and NI for you, plus write a contract to your specifications too.

See this is where I zone out. I can't deal with all the (additional) admin. I just want to give someone a cheque or tx into their bank acc every monto. Explain the paye to me in real idiot terms ro someone that has never employed anyone apart from tradespeople? And how do you pay childminders? Round here they are £6.50 an hour I think. How does that stack up?

I agree with Wormshuffler it could well be worth considering a childminder, especially long term as at some point both your children will be at school, so then you would be wanting after-school care plus school holidays.
Surrey County Council: Childminder search - I have put location as Guildford. Modify the location and click search. That will give you some idea of childminders in your area. Contact Surrey FIS for a full list.

befuzzled that's exactly what I thought before I hired a nanny. Turns out, it's simple. You pick up the phone to a company like nannywageltd.com, tell them who your nanny is, how much you're paying him/her per hour, how may hours per week and they do EVERYTHING for you.

They post payslips to you every month, all you do is write the cheque, or pay though childcare vouchers, exactly as you would at a nursery. Believe me, it's a doddle.

Thanks cm, I did think 38k a year seemed on the steep side but FairPlay to nannynick if that is what they can command! I am talking non royal children here! ; )

any other case studies most welcome as I need to decide which route to go, thanks

Nannynick thanks for your detailed calculations, that is really useful to know if I go back full-time and go the gullying nanny route. Does seem that I would pay a good 2/3 of my salary to the nanny though which seems a bit odd/pointless

Fulltime! Stupid iPhone

Welcome. The other benefit I find to having a nanny is that you get more time at each end of the day with your dc, as you don't have to factor in any traveling time taking them to and picking them up from the nursery/ child minder. You leave when your nanny turns up - whether the DC are ready or not.

It also means that your DC can have friends round to play after school, even if you're not home, or be picked up after school and taken on to after-school activities. Plus, at the end of a long school day, the kids are at home, settled rather than still 'out' having an extra-long day.

Is there another child you haven't mentioned previously... if so, a nanny may become more viable. The more children you have the more viable a nanny is in my view.

PAYE For Idiots (not sure I can explain this simply)

When you pay an employee... the government has decided that you will pay them some money.

You DEDUCT from your employee, Employee Income Tax and Employee National Insurance.
You PAY Employers National Insurance.
So you agree a salary with your employee and then each payday (so say end of each month) you calculate (these days using computer software) the amount of Income Tax and National Insurance to deduct from your employee's wage. You then pay the remaining amount to your employee... this is known as Net Wage.
Once every 3 months, you pay HM Revenue & Customs the Income Tax and NI you have deducted from your employee. Plus you also pay Employers NI (which also gets calculated every payday).

If you have ever had a payslip from your own employer, you will be able to see these deductions going on. Payslips have to show the deductions (at least those which affect the employee).

Nanny Payroll companies will take care of most of this for you... for a fee. Their fees can vary, www.payefornannies.co.uk does my payslip and they charge £115 a year for the basic service, which will cover generating the payslips and telling you how much to put aside for HMRC and when to pay the amount to HMRC, plus they will notify HMRC about how much you are paying your employee and generate forms needed such as P60, P45.

culturemulcher - would love to know the actual figures you found things cost. Especially for things like the miscellaneous things such as Food, heating/lighting. That figure is very hard to know... if someone is a SAHP and is going back to work, then that cost may not be much of a factor at all, as many things would have been a cost if they stayed at home themselves. However if the house is left empty during the day (due to children being at nursery) then those costs do then appear, especially in winter if the nanny likes a warm house.

Travel costs obviously depend on the travel situation.

I use a childminder 3 days a week (term time only) for 8 hr days. I pay £30 per day and if I had another child for after school minding I would pay £4.50 per hour, so for us it would probably work out at £450 per month(-ish as it depends on which days the month starts and finishes).

We're in Birmingham and I provide nappies (as use washable) and all food too. This doesn't come to much at all - dh makes my lunch and dd's when she's having her breakfast and we just have the same.

Not sure if I just have a fantastic deal, but I think £1100 a month childcare is extortionate - and £38,000 a year for a nanny?! [Disclaimer: Not saying they're not worth it, but I could never afford that]

Iwork in surrey and I dont get that sort of money. Nick you are putting people of getting nannies.

I always think that nick makes nannies look more expensive than they actually are, but he is right to point out all the hidden costs that people may just not think of. Nannies are an expensive option.

Wages wise he's about right, but tends to work it out on a long day. Not everyone needs a nanny for 11 or 12 hours a day (my last 3 jobs have been 9 or 10 hours a day) - those extra 1 or 2 hours add up to quite a lot over the year.

I think he over estimates expenses too - £5 per day is a lot, I usually spend £5 per week. I work a 3 day week and we go to toddler group £1, parks free, swimming £2.50 for me, under 5's free, woodland walks free, storytime at the library free, playdates at other nannies houses and them to us free, the occasional ice lolly for me and older dc £1.50 (probably once a month). I'm currently looking after 2 under 3's so they don't have swimming lessons/football/ballet - but these are things that you might well book your children in for anyway - some may be on your days at home and some on the nannies days. We do have an annual farm membership which for me the cost is £1.75 per week. The children and mum are members too and go on days that I am not there - it's a membership they had before I started with them. Remember as the employer you are entitled to set your nannies kitty budget and ask that she finds low cost/free things to do. If you have older school aged children then school holidays can be more expensive, but children don't need weekly visits to theme parks and cinemas - there are lots of low cost options to entertain them.

How much do you get Redglow? I'm on a little over £10 gross an hour.

Some days can be cheap especially trips to the park. Toddler groups in my area are £2 a time. Music groups, tumble tots are too expensive, as with 2 or 3 children when cost is on a per-child basis the cost shoots up.
Swimming we can do for under £5 during school term time... not during holidays.
Daily activities figure was from a few years back, so I might track what I actually spend during September to see if it's still about right or not.

How much do you get Redglow? I'm on a little over £10 gross an hour.

Some days can be cheap especially trips to the park. Toddler groups in my area are £2 a time. Music groups, tumble tots are too expensive, as with 2 or 3 children when cost is on a per-child basis the cost shoots up.
Swimming we can do for under £5 during school term time... not during holidays.
Daily activities figure was from a few years back, so I might track what I actually spend during September to see if it's still about right or not.

Hi all this is really helpful thanks. Yes I have 3 children, 6 about to start y2, nearly 4 about to start nursery at same school but not allowed at after school club and baby 10m, hence why I am thinking I should look at other options.

If you knew what i pay for childcare at the moment I think you would keel over partial, and I am (kind of) used to it. I have to pay for after school club for the 6y old which is £10 per day so £30 per week for the 3 days I am working, the nursery want £64.50 for the baby per full day so that is £193.59 per week, and then 2 hours after school for the 4y old is £24 which is £72 per week, that is £295.59 a week = 1200 odd a month! Hence why I need to know what a nanny would cost me! Boo hoo poor me! I am being an idiot I know! I need to get a nanny! I don't think the incidental costs make much difference to means I am spending all that anyway.