In London, expect nannies Gross salary will need to be £12, possibly more.
Lets use £12 gross an hour. The market is such that there are more nannies than jobs so you should be able to get someone for that figure.
The Calculations for a nanny, 5 Days a Week:
Nannies Salary: £12 Gross per hour
Number of hours per week: 50
Nannies Salary per Week: £600 Gross ? £31,286 Gross per Year
Employers National Insurance: £ 3255 2013/14 tax year (calculation by MrAnchovy?s PAYE Calculator)
Nanny Payroll: You can do this yourself or you can get a lot of a assistance from a Nanny Payroll Company such as PAYEforNannies who my employer has been successfully using for many years now. The cost of having a payroll company is around £115 a year. The payroll company will produce payslips and tell you when and how much to transfer to HMRC in terms of the deductions (Employee Tax, Employee NI) as well as your Employers NI.
Weekly Expenses Kitty (for activities/outings): You may find the cost increases during school holidays. The more children you have the higher the activity cost may need to be ? perhaps consider £2.50 per day, per child. Based on a 48 week working year, nanny working 5 days per week, £7.50 x 48 weeks x 5 days= £1800 total.
Nannies Travelling Costs Whilst On Duty: If your nanny uses their own car, then employers would usually reimburse the cost at £0.45 per mile (this is known as the Approved Mileage Rate). Employers can negotiate with their employee to pay less than this, though you should take into account your nannies costs of providing a car, car seats, suitable motor insurance to include transporting children for whom they care (this can be arranged through Morton Michel and other insurance brokers)
How many miles your nanny would do will vary. Consider the usual mileage they would do to take children to school and back, to get to toddler group, other outings. I would say that I do an average of 3000 miles a year (nannying 4 days per week in a semi-rural location). Start recording the mileage you do in your car during the week, you may be quite surprised how quickly the mileage adds up even if you are just going to the local shops, library, playground, woods, PYO farm etc.
As you are in London, if all travel is by bus/tube/train then factor in cost of a travel card / oyster.
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 am 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 £8 per working day. Suppose you could include cost of Employers Insurance in that (it is usually part of your home contents cover, check your policy). So 5 days x £8 = £40. 48 weeks x £40 = £1920
Total Cost of Employing a Nanny For Five Days Per Week
£31286 gross salary, Employers NI £3255, Nanny Payroll £115, Activity Kitty £1800, Mileage £?, Food/Drink/Heat/Light/Misc. £1920
So it will cost £38,376 or more.
Thus a nanny is probably not affordable and is probably close to double the cheapest childminder you have found so far.