Nanny costs...

[MrsAJH]

Hello -

I am in the process of hiring a Nanny through an Agency and have found a lovely lady with 10 years experience which was important to us. It's for a 55 hour week (730am to 630pm, 5 days a week) and the weekly rate is £500 net or £9ph.

A friend thinks this is way above the going rate for a full-time Nanny as one of her friends only pays £2k a month all in. I can only assume that this is £7ph for a 40 hour week or £6.25ph for a 45 hour week, as any longer hours would be below the minimum wage, or am I being hopelessly naive here?!

Am I wrong to be thinking in cost per hour, which is what the agency advised, for the fact that is a full-time role??

I feel it's better to think in terms of Annual Salary like you would do for most other jobs. It them makes it easier to compare, though as you say the number of hours worked is also a major factor. Full-Time jobs some people do are 35 hours or so. For a nanny, full time can be 50-60 hours - it's like working a job and a half or two thirds.

Your location can affect how much childcare costs. In a city, childcare costs can be higher than say 20 miles outside of that city. Without knowing a huge amount more about the job and your location, I don't feel we can say if the amount you are agreeing to pay is reasonable or not. Even with a lot of information, we probably can't really say if it's reasonable or not as what is reasonable to one person, is not reasonable to another.

Your friend isn't the one employing this nanny, you are. So does your friends view on how much salary you are prepared to offer the nanny matter at all to you?

The agency I feel should be telling you to agree a Gross salary - it's a pet hate of mine about agencies, they still seem to think nannies are not real employees like everyone else - does your own job pay net? I doubt it.

Using www.mranchovy.com/calc/ £9 net per hour, equates to £12.02 gross per hour, based on 55 hours per week, 747L taxcode, no student loan. So that's £38,266 cost to employer (once adding in Employers NI) - Note Employers NI I think goes up in April 2012, so your cost will actually be higher than this.

Remember that you are the one offering the job, so you dictate the terms of the contract. So if you want to offer an annual salary (say £34,000 gross) then you can do so. The nanny may want to know an hourly rate, which could be provided as a Gross amount. Then the nanny can use PAYE calculators to get an idea of what their take home pay would be, depending on what their taxcode is at the moment. If you agree a Net wage, then keep in mind that a taxcode can and often does change. So you could find you pay More, or you may find you pay Less. Can work in your favour sometimes but I feel all employees should be paid on the same sort of terms... why are nannies the only ones to get Net pay deals (I don't think anyone else gets pay done that way, do they?)

As an example of how other jobs are advertised... here is a bit from a job ad I just looked at:

This is a permanent, full-time (36 hours a week excluding lunch breaks)
pensionable post based at ~~~, London with some national travel
required. Whilst this post is currently based at ~~~, future changes
may require the post holder to be based at other locations.
The grade for the post is London B3 APT (Civil Service equivalent: EO) and the recruitment salary is £23,487 per annum.
Key elements of our reward package include 32.5 days annual leave plus eight
days public holiday.

If I was to be looking at different jobs, then this particular employer may be someone I would work for, so when looking at nanny jobs I like to compare Annual Salary along with Working Hours. Maybe I'm odd in that respect

What I will say about the salary you are offering, it's more than I get. However I don't work a 55 hour week and I don't think I would want to do so. Thus maybe I take a bit of a cut in pay for working a 4-day week. Or maybe it's just that I don't live where you do, the location difference could easily be why the amount you are offering is more than I get where I live. Who knows... there are various factors. Your friends friend with the nanny as you say may well not have that nanny working 55 hours a week, and they may not live in the same place as you.

What I feel matters is if you feel it's something you can afford to pay and that you feel is worth paying to get the candidate you want to hire. You can probably get someone for less but they may not have the experience you wanting them to have, so paying less may mean compromising.

Stick with what you are planning to do. With luck you will have a great nanny who will stay many years.

Thanks Nanny Nick.

We are in Essex. About 45 miles/1hour train ride outside of London. Our friend's friend is in Surrey about 15 miles outside London but I admit I have no idea of hours beyond being told 'full-time'. I know our working week is really long at 55 hours and that has and would put people off, but 730am to 630pm is the only way I can continue to work in London with the daily commute. Our son will be 9 months old when our Nanny starts and we were very keen to have someone who would become part of the family and stay with us for several years for our son's care but also any future siblings.

The £9ph cost is such that my decision to go back to work is marginal v staying home, although I do want to return because it would be hard to get back in to what I do after a career break of a few years.

The contract will be on a gross salary basis and I've struggled with the net pay concept that the Agency advised that Nannies talk about. It's not easy to work out the full cost to you as an employer and it's all been very confusing!!

I had rationalised it all and have a great feeling about the lady who will become our Nanny but this friend has made me worry somewhat, especially as the economics are so tight in my decision to return to work.

Any further insights would be helpful, not that I don't think we will go ahead as planned but I need to support my decision to some of my extended family, loving them very dearly saying that, of course! Call it for my own piece of mind if you like.

Thanks again.

Sounds like you are looking at your long term career goal, rather than looking short term. So whilst it costs a lot now, you hope that your career will develop over time, thus income increase, which may not happen if you took a career break.

Are you saying that the Agency told nannies to talk Net pay? If so, that agency may not know their client is... remind them it's you, parent, not the nanny. As you say, you need Gross pay figure to be able to calculate the cost.

Have you seen my previous posts over the years about costs of employing a nanny? Here is one from April 2011
That may help with getting some idea of what additional costs on top of salary may be incurred. Things vary of course but as children get older, admission prices for places to visit may well go up as well - they do seem to do so.

7.30-6.30 sounds nicer than 7-7 which I is what I do two days a week. It isn't unusual for a nanny to be doing long hours, though certainly finding someone happy to do 5-days of long hours may well be harder than someone to do less hours. I quite like doing a 4 day week.

£12 gross an hour does sound on the high side but you are not wanting someone who is just out of college, or someone with a couple of years experience. You are wanting someone with a lot of experience, so that does often come with a higher price tag. One positive thing about paying highly, is that the employee is less likely to leave for a better paid job - which certainly can happen if someone pays low (such as the current thread I'm a Nanny! Help!). You want a happy nanny, paying well can help towards having a happy nanny who then stays for many years.