Help working out nanny fees and payment terms

[EdPops]

Currently looking to hire an after school nanny for when our DS starts school in September and we've found a potential candidate but i really need some advice on 1) rates and 2) payment terms.

Question 1 ...

The potential nanny candidate we found through childcare.co.uk. She's been with her current family for some time but due to a recent move they live a little too far away for her now (30 min drive) and she's keen to find work closer to home providing the new family can offer the same amount of hours / salary as she's currently getting. She's told us she's earning £1,900 per month which based on an assumed (London) hourly rate of £20 means she's probably working 4–5 hours a day Mon–Fri.

In terms of after school care we would only need her for 3 hours Mon–Fri (3.30pm–6.30pm) but have suggested we could add an additional 2 hours on a day for cleaning and cooking duties to bring it up to the figure she needs. We already pay a cleaner £15ph for 9 hours work a week and would simply have her take over these responsibilities.

Does the £1,900 she's asking for seem reasonable? Okay, so i know it's at the very upper end of what i've seen discussed regarding hourly nanny rates but again this is London and finding a nanny is nigh impossible, i feel like we're under a lot of pressure to offer over the amount of hours needed just to secure someone!

Question 2 ...

I've no idea if the £1,900 is a regular monthly payment consistent across the year or whether for instance she only gets that for full months worked, meaning if the family goes away for half term, does she earn less that month?

So i suppose my question is, what is the best / most typical way of working out payment terms when hiring an after school nanny, do you base it on an overall fixed annual salary factoring in any weeks you might not need her during school holidays for example (thus being able to commit to and offer her a consistent monthly salary)? Or do you base it on hours worked per month meaning some months she'll get her required salary but some some months she might get less if you're away during school holidays?

I've been speaking to a number of payroll service companies and will probably go with either P{AYE For Nannies or Nanny PAYE but first we need to work out how many hours we're offering at what rate and how things like school holidays / periods we don't need after school care factor into it all.

Any advice appreciated!

With regards to question 1, for context we currently pay approx £1,300 a month nursery fees for Mon–Fri, 9am–6pm care.

After school nannies are quite unusual, they can earn more with full placement. Could you use a childminder instead?

The nanny would be entitled to 5.6 weeks paid holiday per year, same as any other employed job. You can't just not pay her because you don't need her.

Yes if uou go away you pay her

So she will do 5hrs a day for 5 days so 25hrs

1900 gross a month is then £17g ish per hour

Seem cheap to me for after school

In holidays if she needed to work longer hours or what happens

We paid our nanny for 12 hours a week for 52 weeks of the year. She was paid 1/12th of her salary each month.
She did 3 days a week after school for us during term time and then, during the holidays, she did the same if the kids were in a kids' club which finished at 3 but, with enough notice, was prepared to mix & match her hours, doing longer or shorter days.
She chose 2 weeks off (paid) per year and we chose the other two. We were on holiday for more than two weeks a year so she got extra days off. What she really appreciated was that we give her loads of notice of this so she could find extra work on those days. In return, she was ultra flexible and would carry forward those hours and do them at another time. We never used up all that she carried forward but I didn't care.

Question 1

Whether it's reasonable or not depends on the market...if you're spoilt for choice for other good nannies at a cheaper rate then, no, it's expensive. If she's your only option then she can pretty much charge what she likes!

For a good, reliable after school nanny, willing to stay long term, I would be looking to pay about £20ph net for just the after school hours, maybe a bit less if offering more hours.

Have you asked the nanny is she's happy to take on the role of cleaner? If not, do it carefully. Very easy to get a childcare professional's back up by asking them to clean your toilet.

Question 2

You pay her year round whether you use her or not. She will be entitled to 5.6 weeks holiday which you can split 50/50 (she chooses half, you choose half).

Will you need her to do full days in the holiday? Or cover when they're sick?

Always discuss gross. Not nett

She'll be working part time though, 3 hours a day Mon–Fri so won't be entitled to the full 5.6 weeks as far as I understand?

She will still be entitled to 5.6 weeks - but a week is 3 days not 5

People pay nannies all sorts of different ways. In my view the easiest is to agree an annual salary and then use PayPal for nannies or similar who will then calculate the monthly salary, tax and NI accordingly for you. Be aware that you will have employers tax and NI to pay so make sure you factor that into your calcs. Use a nanny calculator if needs be. The hourly rate quoted is just not relevant unless you know whether it's gross or net etc

Feels a bit off to ask her to be a cleaner for you. I'd be pretty annoyed if my employer asked me to clean, as that's not the role I've applied for, nor one I've taken years to be qualified for.

Op have you looked at Koru kids which is designed exactly for the situation you describe?

I've roughly worked out that across a full year starting Oct 2nd 2023 the nanny will work 693 hours across 231 days, that's 3 hours Mon–Fri term time plus a set number of weeks working the same hours / days during holidays.

That works out as an average of 13 hours per week worked across an average of 4.5 days per week. Using this holiday entitlement calculator it tells me the nanny will get 73 hours holiday per year. Is this not right?

Thanks. We were considering PAYE For Nannies for the contract and payroll service once we've figured out the hours we need.

How does Koru Kids differ from a payroll service and why would it be more beneficial?

Term time only workers still get a full 5.6 weeks. So if she works 15 hours a week, she will get paid for 5.6 weeks x 15 hours in the school holidays.

Sorry I misread your post and thought you said she would be working 3 days a week.

Yes she should be entitled to a min of 5.6 weeks per year - and her contracted 'week' is 15 hours. So 84 hours bare minimum annual leave in a full year. Are you planning on her contract being TTO?
There was a recent court case showing regarding TTO and annual leave, but the PAYE company should be able to advise and manage all of that side of things for you.

It was a service she offered

With regards to a TTO contract I'm not sure as we will need her for a few weeks in the school summer holidays and at least 1 half term holiday, same 3 hours Mon–Fri.

Would we be better basing the contract on term-time only and figuring out another way to pay for any hours she works in the holidays?

Maybe a term-time, 39 school week contract is a simpler method then that what I was doing calculating exact hours.

So it would be 39 weeks (with each contracted week being 15 hours) plus 5.6 weeks paid annual leave. So, 44.6 weeks in total (or 669 hours).

How would I deal with the extra days we might need the nanny during school holidays, do you simply have a clause in the contract saying any additional days required will be agreed in advance and charged at the same rate? And are payroll services typically flexible in terms of adding additional hours onto the payslip for any month they are worked?

Yes payroll service can easily deal with extra hours. You just tell them each month what extra has been worked

If i already know we'll need the nanny for an additional 6 weeks per year (same 3 hours Mon–Fri) during school holidays could this still form part of the same TTO contract or does it then become a different type of contract due to it strictly not being term-time only anymore?

I've reached out to the payroll service for advice but they're being slow responding and i have a call with the nanny today to chat about contracted hours so any advice would be really helpful thanks.

I don’t think you can expect to ask the nanny to commit to an additional 6 weeks during the holidays without building it in to her contract. Overtime is meant to be optional she might have accepted the job on the basis of doing something else in the holidays such as a holiday club.

I think if you want 39 weeks term time plus 6 weeks extra in the holidays and then you have to pay 5.6 weeks holiday then you’re at 50.6 weeks and so may as well put her on a year round contract which guarantees you the holiday cover and any time you’re away and don’t neee her you can ask her to do stuff like sort children’s toys or clothes or other nanny appropriate duties.

Yes I think this is the way we'll do it thanks.