Nannies: hidden costs?

[SoftFroggie]

I want to work out what hourly rate I could pay a nanny when I return to work, and still be at least 'cash neutral' compared to being a SAHM. Can you all help?

I start with my take-home pay.
Then I need to deduct:
agency fees (they've told me what they charge)
car insurance to add nanny to our car (I can phone to ask for an indicative quote)
what else? Nanny's lunches, presumably? training? Generous Christmas presents etc ....

then allow for employer's NI, employee's NI, employee's tax to get to a net figure.

I'll assume I'm allocated her (his) full tax-free allowance etc as their main employer. As the comparison is with SAHM, I would pay for activities, electricity at home etc anyway. Are there any other costs I've missed?

Can I afford to go back to work? please?

(Have 2 kids now, hated the nursery thing, and would find a CM too inconvenient, so it's nanny or nothing).

Weekly cash float? We do £50 - covers travelcard for school runs, afterschool treats, petrol if using car, emergency groceries.

Emergency fund for sickness, covering holiday etc. - work on 5 sick days/year, 2 weeks holiday cover (that's on a basis of 4 weeks annual holiday entitlement, but with you covering the other 2 weeks) - when you'd effectively be paying double

this is such a sensible thread! - I'll see what else I think of

Is your nanny going to be live-in or come to you on a daily basis?

Some things I can think of:

Home Insurance - check that it covers you for accidential damage by a visiter/employee.
(will obviously depend on your view of insurance as to if this is worth the bother)

Company Car Tax? - By providing your nanny with a car, will you be liable for company car tax? I'm not sure on that one, worth finding out. I know families who have a nannies and they get the nanny to provide their own car - mind you, they are live-out (Daily) nannies, rather than live-in.
Also with regard to insurance, cost of insuring a nanny under the age of 25 may mean that you go for a nanny aged 25+. Do contact your insurer for details of adding sufficient cover.

Food - Breakfast for nanny, tea/coffee/etc. Dinner for nanny. Most nannies would eat with the children - after all it's a social event and encourages discussion at the dinner table.

Fuel cost for trips/school runs.

Misc Expenses - Having a weekly kitty for misc expenses can be very handy for your nanny. Amount will depend on the children's ages, a budget of £10 per child per week would be suitable and can be used to pay for small expenses while out, toddler groups, drinks/ices, parking, attraction admission charge etc.

Not sure why you should be paying for your nannies training. You could of course pay for courses but you don't have to do so.

There are more and more nannies and nanny agencies these days accepting GROSS salary figures, though that may make little difference to your calculations.

Remember that if your employer will provide Childcare Vouchers, then you could use £50 a week of those to pay your nanny, and thus you could save over £800 a year on your tax/ni bill. Care-4.co.uk has a calculator which can help you see how much you could save.
Note: Your nanny needs to be an Approved Childcarer. Some nannies are going through the approval process.

Nice to see that you would consider a male nanny, do dislike it when people only think of nannies as being women. Over the years I've met some great male nursery nurses/nannies.

Just thought of:
Nanny-tax or other PAYE company (unless I do it myself)
CRB check, or do they pay for that themselves?

£50pw cash float? I don't get through that much including the £20 I pay our cleaner - but different expenses here in the sticks.

I think we'd cover the sick / holiday out of our own holiday and/or use grandparents. Thanks for reminding me to allow for sick leave.

Then there's the costs of working - but for me that's just a few decent clothes, as I work mostly from home.

binkie, I quite agreee, it's a great thread.

£50 a week, gosh, wish I had got that much back in my nannying days. Mind you, instead of paying for activities, you could just give a increased weekly kitty. If a very expensive activity is planned (such as a trip to Legoland) then the children could SAVE up for the trip by having a few weeks of very low cost activites (such as walking in the woods!).

Nannies would have a CRB check already, agencies require that they have one these days. Approved Childcarers certainly have one (which is updated annually) as it's part of the approval process.
A nice employer may pay for their nanny to become Approved, as it can save the employer money in the long run.

Thanks so much for your comments, Binkie and Jo. I'm looking for a daily nanny for 3 days per week approx 10 hrs per day (I work part-time). The car would be my car for 'on the job' use only - for various reasons, we expect it to be better for nanny to use my car than her/his own - so I don't think the co car tax would be applicable.

I'd anticipate the nanny and kids doing the same activities as I would if I were SAHM, so no extra expense: is this reasonable, or are they likely to do more / more expensive things?

Approved Childcarer: they need to be this to make use of the £50pw employers voucher, don't they? The Sure Start website claims that it costs £96 (plus any courses required) and the care-4 website says you save £800 to £1000 per yr, so worth us paying for if the nanny doesn't already have it.

Training: I was wondering whether I should pay for, for example, first aid courses.

Many thanks. Anything else? How much to allow for these items? Do people use Nanny-tax comapnies or do you all DIY?

Hi softfroggie. Yes, I must agree this is very useful thread. Another place to look for information on your resposibilities as an employer is nannytax.co.uk. There is a very useful calculator on the site where you put in nanny's gross pay per week and it tells you how much that will actually cost you.

Regarding paying for traing of any kind whether it be whatever is required to become an approved childcarer or first aid or whatever I think that if you make it a requirement to obtain the position then it is nanny's job to obtain it. But, if someone already works for you and you then decide you want them to have this training then you (the employer) should pay for it. Or, even if they don't already have this, you might negotiate that they will get it on their own time/expemse and write that into the contract prior to hiring them. Then, the obligation is theirs, not yours.

I recommend using nannypaye.co.uk or nannytax.co.uk. Nanny paye is cheaper. But, if I were to judge from their websites, nannytax has more services to offer (and presumably more staff). But, if cost is an issue, then nannypaye works okay. We use nannypaye.

My nanny dind' use anything like £50 per week! She used to jot down expenses and we'd re-imburse a float. She used to go to lots of local free activities, and then discuss it in advance if there was an idea for a bigger more expensive outing.
My home contents insurance (Pru)covered 'domestic servants', which they said included a nanny, both for accidents to her or to property. It is worth checking this - my brothers DS accidentally knocked his nanny's front teeth out with a tambourine and they were left with a £1000 bill for bridge and crownwork etc!

We didn't give our nanny lavish gifts at all - and (compared to some I have seen on MN) a really mean Xmas bonus of one day's pay. But we treated her v fairly, and we are not in a sector where we get bonuses, and she didn't seem to expect more.

PS I found our nanny through Simplychildcare - no agency fees. (just a £30 subscription)

Our nanny red purse Float is about 20 a week maximum.

She tends to be very thrifty about activities and is much more likely to do storytime at the library and other Council run activities during the holidays than I would, just because she is more aware of them and researches them.

She brings her own lunch (although this is a first and I have been stung by nannies in the past for £5 sandwiches and salad bowls every lunchtime).

Think of what you will save in terms of time - most nannies will pick up parcels from the post office, pick up dry cleaning, wait in for an electrician, take children to doctors for non-urgent appointments (drastic ones and injections, I do myself). So you end up not having to take time out of work or lunch hours for those things, which has got to be a hidden saving.

Now my kids are at school, my nanny will do the weekly shop as well, which is great......

Yes, I give about £20 a week. I just give her a £20 whenever she runs out actually. But, she is quite thrifty, and I would NEVER doubt her honesty. So, I just give it on demand, but I think it averages about £20 per week and it also cover transportation cost. Howver, activities are generally pre-paid by me (like Jo Jingles andTumble Tots) so that is not included in the £20.

Hmmmm.... I've noticing comments on here about h ow other people's nannies seem to run more errands than mine. Appears I've missed something. But, then she does my laundry, so maybe I haven't missed anything.

Yes, I give about £20 a week. I just give her a £20 whenever she runs out actually. But, she is quite thrifty, and I would NEVER doubt her honesty. So, I just give it on demand, but I think it averages about £20 per week and it also cover transportation cost. Howver, activities are generally pre-paid by me (like Jo Jingles andTumble Tots) so that is not included in the £20.

Hmmmm.... I've noticing comments on here about h ow other people's nannies seem to run more errands than mine. Appears I've missed something. But, then she does my laundry, so maybe I haven't missed anything.

Gosh, consternation about our float amount! The travelcard is over £20, so as I've got two kids it's only £3 a day per child, which is pretty soon eaten up by an afterschool smoothie & vegetables for dinner. I guess I could be stricter - but equally where we live there are families whose nannies take the kids everywhere by taxi, so I don't think we're a totally soft touch.

Anyway, the important thing I think is to decide on a float amount and both sides stick to it - for us the "let us know what you spend and we'll reimburse you" system is recipe for grief.

Thanks for all these good comments. About the 'float': is there any reason to expect the nanny to spend more on doing things with the kids than I would? As the comparison is with me as SAHM, I would pay for some activities anyway. The extra would be an extra mouth to feed at lunchtime - which I would expect to be mainly at home, bread / cheese type stuff.

I'm not mean, just want to check I won't end up out of pocket for going back to work.

The other gain I've thought of to add in is the IR's credit for on-line PAYE filing that they are offering for the next few years.

I've always liked nannies who have lots of other nanny friends (so that charges can play together - and also as a personality indicator, too) and IME there is more of a going-to-cafes or having-fun-picnics kind of culture among nanny groups than among SAHMs - maybe because SAHMs are freer to use their own homes for mass meet-ups? Don't know. Anyway, that is one way in which you could end up with higher "entertainment" bills with a nanny than with a SAHM. As you can probably guess, I think that's fine.

good point Binkie, hadn't thought of that. (I'd think it's fine, too, just want to allow for everything). If it's an extra £5 per week, that's £250py, which isn't insignificant.

Hmmm. Our phone bill went up when we had a nanny - all those nanny-meet-up-arrangements-calls are made to them on their mobiles!

Oh indeed, yes - phones are a definite item in your spreadsheet, SF! But how much? - I will check at home.

The phone can have a big range. Our first au pair/nanny used her mobile like it was going out of style. Thank God for pay as you go. Think if she had had a monthly bill plan I'd have gone into shock when I got the bill. Current nanny is a big technophobe. In 6 months, I think she has used a grand total of about £50 (less than £10 a month). On the other hand, she is not in the habit of carrying it so can not be contacted by me during the day.... a bit of a sore point actually.

I would suggest a pay as you go phone with a set rate of say £30/month and if she wants to use it for chatting on personal use that;s fine, but she'll have to top it up.

I didn't give our nanny a phone! But she used our landline to call other nannies, or make other arrangements. Probably personal calls, too, to be realistic.

SF: have checked phone bill history - bit of a shock: one of our past nannies tended to use our landline to call her nanny friends' mobiles, which added about £30-40 a month to our bill.

Our other "hidden cost" is that, when it seemed fair, such as a sudden nasty bug or an injury, we paid for our nanny to see a private gp (min £50 a visit).

dh says that's car insurance is the worst one, so shop around a lot. AA would have tripled the cost; NatWest were more reasonable.

He also notes that the children's hair got cut at much posher places for matchingly posher prices than we would have done. But presumably hair, shoes, etc. are things you could do yourself if working PT.

I work as a nanny

I never use the family phone for personal calls ever, and always try and keep it short if calling one of my charges friends parenst etc

as for a float, expcet it to go up quite a lot in the hols.

I probably spend about £100 / week term time... but that does include the supermarket shop (of almost all organic food) and i do a few activites each week that cost about £4 - £10 for both children.
Also includes my milage which is quiet high cause of where they live!

I always take own drinks / snacks etc for me and the kids...

i also eat all my meals with the children, but always what they are having

Have you never thought of asking the nanny to cut the kids' hair?!

Has always worked for us ...

Oh goodness, I'd be happy if my nanny would BRUSH her hair.

My next nanny is going to be well groomed herself, in hopes that she will pass that trait on to DD.