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Paid childcare

Discuss everything related to paid childcare here, including childminders, nannies, nurseries and au pairs.

Confused about how to pay a nanny

23 replies

fluffygal · 20/08/2012 12:27

I have been looking at childminders for my 22 month old and 4 school age children. I worked out to pay a childminder it averages out to £8 an hour as my older 4 will need 3-5pm each evening. A nanny has contacted me asking if I would consider a nanny, but upon looking into it, I am confused as to how much it would actually cost to pay a nanny! I have just read somewhere that a nanny should expect about 300 quid a week pay and that's before tax, which you then have to pay on top! Is this correct? It seems like a very expensive option, even with the amount of children I have. Could anyone explain it to me properly?

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fluffygal · 20/08/2012 12:29

I meant after tax not before, so 300 and tax to pay on top of that.

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SkiBumMum · 20/08/2012 12:32

Nannies usually like their salary to be expressed as take home pay (but you should gross up for contractual purposes). I guess like anything it depends how experienced, how many hours and how many kids! £8 net per hour is about right round us (for 2 kids). We pay a payroll company to figure out the tax for us.

nannynick · 20/08/2012 12:32

You agree an annual salary which you pay monthly or weekly.
You deduct employee income tax and ni and pay that to hmrc.
You pay employers ni, this is paid to hmrc.

Probably easier to do an example. What gross salary was the nanny wanting and how many hours per week childcare do you need?

BobbiFleckman · 20/08/2012 12:34

yes it's much more expensive than a childminder especially since most of yours are only 2 hrs / day during termtime (what about holidays though?). The point is that with a nanny they are only earning from you whereas the childminder will have other sources of income and be looking after their own children on their own turf.
it is a luxury, but if you look at the fact that the nanny will be doing all your childrens' laundry, changing their beds and doing their rooms for you, will have their friends over to play / collect them from their friends' houses / take them to after school swimming etc, you are paying for the massive extra freedom and help.

fluffygal · 20/08/2012 12:48

I knew they were more expensive then a childminder as most cm's charge 4-5 per hour round here. I know how it's worked out, but then how much is the average Gross pay for a nanny? Sounds like they earn loads if 8/hr is only the net. I was a bit confused as to why the nanny was asking me about having a nanny instead of a cm as it implied they would be a bit more similar in price (similar as in not quadruple the price of a cm, obviously not expecting them to be the same price). Nanny didn't say how much she was charging, I would need 9-5 tues-fri. Would need an ofsted registered nanny though so all this could be impossible anyway.

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BobbiFleckman · 20/08/2012 12:53

no it's all possible and depending on what you do in teh school holidays it coudl actually be cheaper. If your older 4 will be with a childminder full days in school holidays it's going to work out better for you i think. To get gross pay, rough & ready way is to add 20% to the net salary - £8per hour x however many hrs per day x 4 days a week x 52 weeks / year (you'll pay holiday pay for nanny which you may not for CM)
then add 20% on top for tax - that's not accurate because there'll be a tax free allowance / 10% band but then there will also be NI on top

fluffygal · 20/08/2012 13:19

I think it will work out too expensive by the sounds of things, not sure why the nanny contacted me if it was going to cost over double what the childminder would cost me. Ah well, at least I looked into it. I wouldn't need care in the term time as I am going to uni so will be off. Have realised I am definitely in the wrong profession though, sounds like being a nanny is quite a good wage!

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Blondeshavemorefun · 20/08/2012 14:31

so you need a nanny for 32hrs a week 9-5 (8) times 4 days tue - fri

using mr a's wonderful tax calculator

if you pay a nanny £8nett though should always quote gross so £9.50gross, then will cost you just over £17k a year - this is gross of just under £16k to the nanny - equalling nett £13 349 to the nanny - plus employers ni of £1164

having a nanny will make your life with 5 children so much simpler as you wont need to get kids and you ready and take to cm and if neeed be the nanny can bath younger ones for you and have in pj's when home from work - giving you some time to spend with them before they go to bed

Runoutofideas · 20/08/2012 14:54

I have just worked out what I would charge you as a termtime only childminder at £5 per hour per child and it comes in at around £11,000 per year. (I don't charge anything in the holidays as I am not open, but most childminders would charge something....) You need to work out whether the convenience of having a nanny solely looking after your children, is worth the extra roughly £5-6k. I would suggest it might be, especially if you can find someone who wants to work term time only. I think you may struggle to find a childminder who has 4 after school places too - depending on the ages of your children - if some are over 8 it may be easier.

fluffygal · 20/08/2012 15:02

Ah ok, also we get tax credits so if I could find an ofsted registered nanny some of this extra cost is covered. My children go to different schools as we moved areas and they are on the waiting list slowly getting moved over to the local school, therefore I need one childminder for 2 children, and one for the other and the toddler.

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HolyOlympicNamechangeBatman · 20/08/2012 15:22

A nanny will be more expensive, but not quadruple what a childminder would cost.

I would guess the nanny contacted you because she thought you might find the convenience of a nanny worth the extra pay (and she's looking for a job!).

fluffygal · 20/08/2012 15:28

I only thought it was quadruple as when I googled one site said you needed 32k for a nanny, and all the figures of paying for this, and then something else, and then more stuff sounded like it really added up. I only advertised needing care for the 22 month old and asked for childminders to contact me so thought it was odd for a nanny to contact me if she wasn't offering a similar deal to a cm.

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fluffygal · 20/08/2012 15:29

Ah to live in a world where you have a spare 5k to pay for childcare! grin

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fluffygal · 20/08/2012 15:30

Grin try again!

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Nannyto2 · 20/08/2012 17:08

A nanny could work better as if a child is off school unwell etc the nanny will still be working so you wont need a day off.

I think you should work out all costs and list the pros and cons of both types of child care

Blondeshavemorefun · 20/08/2012 17:32

hi fluffy - just realized you are near me as saw your ad on another site - if you dont get any nannies from sites like gumtree/netmums etc then i can recommend some good local agencies though obv means you will be paying their fees if they find you someone

nannynick · 20/08/2012 17:50

The tax credits side of things is confusing and I don't understand it all fully. So this spreadsheet may give an idea as to the cost.

I did initially try to work out the grant and/WTC side of things but quite frankly it got too confusing.

From my calculations... based on a childminder charging £5 per child and only charging for 40 weeks per year, nanny costing £10 gross per hour and only requiring pay for 40 weeks plus statutory holiday,

Childminder: £12,800.

Cost of Nanny: £19,238. Note: Cost of nanny is different to nannies salary. Nannies salary in this case is £14,600 includes 22.5 days of paid holiday.

There are lots of if's and but's... for example you may not find a childminder prepared to work term time only, or you may find one who will but they will charge a retainer fee during school holidays. You may not find a nanny who would work term time only. A nanny may want less/more salary than £10 gross per hour (£14,600 per year based on 32 hours per week, 40 weeks, plus 22.5 days holiday). Are the misc costs I have added in for the nanny, things like activities budget, mileage, reasonable... they could be under or over estimated.

You also have the added problem of the possible need for two childminders, who may have different terms of business. The childminder who only provides after school care, may well charge a per-session fee rather than per hour, so £10 (£5 per hour) may not be the correct amount for the after-school care for each school aged child.

A big advantage of having a nanny is that the nanny would do all the running around between schools, rather than you doing it.

As you would be a student, rather than working, you may be better off claiming the Childcare Grant than childcare element of Working Tax Credit. If you are not working at all, I don't think you can claim WTC anyway so the Childcare Grant may be all you can claim - it may pay more, as the cap is £255 per week, rather than 70% of up to £300 childcare cost (which in your case caps you at £210 per week). However, how do you know if you would get the full £255 per week (during term time) of the childcare grant? I don't know how they work that out.

A nanny is going to be more expensive based on the information you have provided plus the assumptions I have made.

Given that the Childcare Grant is capped at £255 per week and that either of your childcare options will cost you more than £255 per week, you will have that other money to find. So if you are getting a loan for that, you probably want to go for the lowest cost option. I would suggest you keep looking into childminders and establish your costs for that.

I only thought it was quadruple as when I googled one site said you needed 32k for a nanny

That's quite cheap for a full time nanny (who could be working 60 hours per week, all year round). It could easily in my view cost that, however you are not wanting 60 hours, you are wanting 40 and only during term time. I think £20k would cover it.

Have realised I am definitely in the wrong profession though, sounds like being a nanny is quite a good wage!

It certainly can be a reasonable wage. Have to say I got paid more in other jobs, such as Sales & Marketing, IT Support, than I do now as a nanny. It's not the easiest of jobs, as you know having 5 children of your own.

fluffygal · 20/08/2012 18:06

Oh really? I have spoken to one person from that site but she wants 10 net and bring her child with her. Would have expected discount with having their own child there. How much do agencies charge roughly?

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Blondeshavemorefun · 20/08/2012 18:12

£10 nett and nwoc is a bit steep imho

Generally tho not always seems a nwoc should expect 20% less then a nanny with no child

Think she is pulling a fast one and offer a wage that you think is fair and can afford

Blondeshavemorefun · 20/08/2012 18:13

Agencies vary. Give them a call and ask them for their rates

Sam at Elizabeth Henry and Hazel at east green are both good :)

fluffygal · 20/08/2012 18:33

Oh sorry nannynick only just saw your post, thank you so much for all the info and musings. I will be working 3 nights a week whilst at fulltime uni so will get WTC. I earn 7.50 an hour and that's before tax so to me a nanny's wage seems pretty good! I also work roughly 70 hours a week at the moment but earn half what a nanny would due to poorer pay and tax on top. I don't find looking after children too challenging, but then I mainly only have my own (although two are my stepsons) so could be different with others! I have seen childminders and none charge a fee for term time only and all charge by the hour not session. I would expect to pay a nanny during the half terms etc, and could use her anyway as would have assignments to complete.

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fluffygal · 20/08/2012 18:36

Also, my mother in law is around to help on days that the nanny would have as holiday, that would save on extra childcare.

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fluffygal · 20/08/2012 18:40

Thanks blond will give them a call.

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