Nanny share costs - help!

[stillsleeptraining]

Really hoping you can help me - I just can't figure out the cost of doing a nanny share and different calculators give me different things.

The maximum cost to each family we can afford is £1,500 a month and we're trying to work out what that is at a net and gross per hour basis. This is for 45 hours a week.

I've been using this calculator - https://www.nannytax.co.uk/gross-to-net-salary-calculator. But other calculators give me different answers.

It ask me for the tax code. Is it 628L?

Am I right in thinking that £15 an hour gross would be a total of £2925 a month between families? (£15 x 45 hours = £675 per week). So our max would be £15 an hour gross?

Any feedback on that rate would also be really appreciated. We'd done our research via families with current arrangements, which made us think it was an option. But I'm seeing a lot of nannies looking for £16+ an hour net (which is way over what we were looking for).

Thank you!!

I think you will also need to pay employeers NI and pension contributions ontop of the salary.

We nannyshare and have a fairly complex formula. Our nanny gets £15ph net for when she has all the children, but that's not FT. We also pay in full for her during school holidays. Our "smoothed" cost, including tax and NI, is about £2k monthly, slightly less for the other family. We put aside our employer's tax and NI on a monthly basis and then pay it quarterly.

I would say £15ph gross is low for a share arrangement, which typically pays a bit more than a sole family as more children and more complications. IME £11-12ph net is the starting rate for single family nannying in London.

£15 x 45 hours per week x52 per year is £35,100

• 13.8% national insurance = £4,844
• 3% pension £1,053 = £40,997 Per month is £3,416 So no, you can’t afford £15 gross per hour. You can afford £13 gross per hour. Also make sure you’ve factored in petrol, playgroups, toddler groups, days out etc. It adds up! I wouldn’t muck around quoting net rates because ultimately that depends on the nanny’s own tax circumstances. 628L doesn’t sound right though.

Definitely agree gross with your nanny, don’t talk in net.

Standard tax code is 1257L.

£15 gross is low for a nanny share. Have you considered how you will cover the nanny’s sick pay, holidays, maternity leave, pension, food and expenses/mileage too? Payroll company? Activities kitty for the children?

Thank you - this is really helpful

@crazyguineapiglady

Definitely agree gross with your nanny, don’t talk in net.

Standard tax code is 1257L.

£15 gross is low for a nanny share. Have you considered how you will cover the nanny’s sick pay, holidays, maternity leave, pension, food and expenses/mileage too? Payroll company? Activities kitty for the children?

I'd assumed that the £1.5k a month would be consistent, like it is with a nursery. So that would be paid holidays

Is it being split 50/50 between the families?

If so then one family would use tax code 1257L (or whatever the nanny's tax code is, as it might not be full allowance), and the other would use BR (Basic Rate). HMRC might split it, so 628L for one family and 629L for the other. I would ignore tax codes though and calculate things on gross pay.

So you have a budget of £1500 each, £3000 per month total.
45 hours per week, each family paying the nanny £9 gross per hour.
45x9=£405 gross per week x 52= £21,060 gross per year /12= £1755 gross per month.
So doing this as two employments, which saves National Insurance, won't work as to get the figures to work you would need to offer below National Minimum Wage.

Therefore doing it as Joint Employers is an option - discuss with a payroll provider.
Budget £3000 per month.

£15 gross per hour, 45 hours per week = £35,100. Employers NI £3623.88 and Employer pension is probably £866, then you have payroll admin costs and activities and mileage/travel.
So £13 gross may be more realistic.
£13x45x52=£30,420
Employers NI = £2978.04
NICs LEL=£6240, so Employer pension = 30420-6240=24180, *0.03=£725.40
Total so far £34,123.44 and then payroll admin say £250, and then activity budget and travel. It may just come in under £36,000.

Where are you located?

Have you factored in Tax Free Childcare? You could put £8k per child in to TFC and get topup of £2k. Nanny would need to be registered/approved (it depends which country you are in).

It all depends on your location?
I'm paid roughly that amount gross for a nanny share. Always agree gross.
Some nannies believe you should be paid NMW from each family but that isn't a legality at all, so long as the overall hourly rate is above MW. My employers employ me separately and the hours are the exact same in both contracts but there is a section in there that states that my hourly rate is X amount based on the other family paying the same.
If either family need me separately then they pay my single family rate which is above min wage.

Don't forget costs etc.. for groups. I'm quite savvy in general but if you have a budget you could do a cap of what you're willing to spend on groups/ outings etc...

Thanks @nannynick , @Crowtooyo . Really, really appreciate you being so specific.