The Real cost of a Nanny

[ChrissieLC]

Have you worked it out?

I am an IFA and an employer of a nanny. I have come across so many people that are paying for nurserys nannies etc and not really realising how much they are forking out to go to work, and more worringly alot of them are actually working at a loss without realising!!

The HMRC is clamping down on nanies getting paid part in cash, so those days are over if you are still doing that, however the industry will take a while to catch up with this and whilst net salarys are still in contracts nannies will be expecting the same pay. One day it will be gross salaries and salaries will have to come down for nannys as people will cotton on to the fact they can't pay cash anymore...not even for housework duties whilst the kids are at school.

Ok so real cost. Well nanny costs vary of course. In my area £7 net per hour is a good wage, in london more like £9 or £10 (if you are paying more than that look o get a nanny to commute from places like bedfordshire , essex etc as £9nph is a very good wage for them and there are 8 nannies for every job)

So say on averge you pay £450 net per week for your nanny.

That actually amounts to £680 you pay out of your own net wage.

Plus add on petrol costs of the nanny, agency costs, ofstead registration costs, payroll costs, redundancy or maternity costs and your own cost of going to work (travel, suits etc). Well to clear that cost of the nanny with no profit for yourself you will need to be earning £45 to £50K per year to just cover the cost. So whats left after that is profit for you (after of course you pay your 40%)

So say you are earning £70K a year. Chances are all you are getting in your pocket for all that hard work is about £12k a year.

Is it worth it?

I do actually have a nanny myself, however worked out that working 3 days a week actually makes me better off than working 5 days as I put everything through payroll. But not everyone has the option of working less days.

Such a shame we cant pay for childcare out of our gross wage. Once cash in hand has gone, expect nanny wages to drop and nanny jobs to be fewer hours. It's time the government saw they are killing off 2 people who would be happy to work full time by not placing incentives for those who have to pay childcare.

I assumed everyone did know until satrted doing the job I am doing and realising that there are some out there thinking they are making a profit going to work and when we do their calculations it turns out they are working at a loss that they didnt' realise.

A couple said they would not be at work if they had known. I have to admit I was really surprised by this as thought everyone would have done their sums too, but given recent experience I thought it was worth pointing out in case there was anyone else out there doing the same.

It depends on what industry you are in as to whether you can dip in and out of career I think. Plenty of people would not be at work if it was loosing them money though, despite the career. I certainely wouldn't, but then it would be easy for me to get a job again in a few years (she says!!)

Nowhere in the Chapter 2 link does it discuss the overall contribution to the economy of female wage earners claiming childcare vouchers. Bank of England reports invariably stress the hugely positive effect on economic growth of women being retained in the workplace, but in this policy paper all we see are discussions about the notional cost, based on the assumption that these earners are not generating more to the economy than the cost of providing childcare tax relief.

This country is run by a bunch of innumerate idiots IMVHO.

Good point Killer Heels! When I first started as a nanny this was how most career mums thought and knew the cost of childcare was a means to an end.

I think many women thought like that until recently, but I am starting to see so many women who have done exactly that being laid off, so they have effectively been subsidising their own work, owe money now, and now have no obvious means of recouping that investment. Nothing comes with guarantees in life.