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).

That was a past nanny .. our current nanny's boyfriend does ds's hair with clippers and he does the most brilliant job, best trims ds has ever had - he's got hair like a thatched cottage, so clippers are ideal. So yes, if you get the right nanny you may get a bonus there!

LOL at thatched cottage

Are you trying to work out if it's worth it to go back to work? In which case re nanny's lunch/coffee drinks (which are a bit difficult to cost), you could look at these a different way (bit like the electricity thing) - assume your nanny will eat and drink what you would if you were at home, and instead count the cost of your own lunch/drinks while you're at work. Also you should factor in your own transport to work, which you need to subtract from your net pay to see what your true net pay is (coz you won't get paid if you don't make it to the office...)

Are you trying to work out if it's worth it to go back to work? In which case re nanny's lunch/coffee drinks (which are a bit difficult to cost), you could look at these a different way (bit like the electricity thing) - assume your nanny will eat and drink what you would if you were at home, and instead count the cost of your own lunch/drinks while you're at work. Also you should factor in your own transport to work, which you need to subtract from your net pay to see what your true net pay is (coz you won't get paid if you don't make it to the office...)

god - either I'm very mean or our nanny is very thrifty. Our float is about £10 a week (but thinking about it, that's only 3 days for us) - or often less. Doesn't include termly-paid activities (eg gymnastics) which I pay by cheque but does include playgroups (usually only 1.50 a go). Also includes the odd bit of shopping (usually not very much as I'm reasonably good at getting what our nanny wants/needs); and maybe lunch out once every two-three weeks

Thanks Hatsoff: yes, I am trying to work out whether it's worth returning to work. I don't want to end up out of pocket on the 'unforeseen' expenses, and it's going to be close. I was thinking more like a £10 float (3 day week for me too) plus I pay for termly fees - but most of that is what I would spend if I wasn't working. I suspect car insurance is the killer, haven't dared call up to ask yet.

I actually work mainly at home, so my transport costs are zero (last year was office based, and spent £6 per day on fuel alone). Also, being home based, can't possibly spend money on sandwiches, coffees etc!

Softfroggie, Does she actually need to drive the car. My nanny has no car, but the train is close enough that they can travel by rail. So, train tickets are include is our weekly spend of about £20. My nanny works a five day week so I guess that comes to about £4/day. But, I have to organise and pay for everything in advance (Jo Jingles, Tumble Tots, etc.)

Uwila - oh yes, we live 1.5miles from anything so that's 1.5 miles to the nearest bus stop (buses once a day), to the nearest toddler group, to the nearest small shop. Within a mile of here there are 8 houses, plus horses, woods, river, nothing else; we see foxes, deer in the garden - idylic (sp?), but driver essential.

Car insurance can be a killer - especially if you have a big/fast car and if the nanny is quite young. Ours was way too much to be worthwhile. Thankfully our nanny agreed to use her own car - you need to work it out quite carefully if you do that - it's not just a case of paying petrol - the first thing is to make sure the nanny's insurance covers her and if not you'd have to pay any extra. Then you need to work out a mileage - the AA website gives you breakdowns of mileage - I can't quite remember how we worked ours out but the AA thing is really helpful. I sympathise as I went through exactly the same business a couple of years ago - it's a bit demoralising to come to the conclusion that your net contribution to the household is somewhere in the region of zero, but I would be pretty unhappy not working. For the first few months I would be really careful about how often I got a cappucino on the way to work, cos it really would tip the balance, but given that dh's income keeps us comfortable, (and he would not, for one single second, contemplate depriving himself like that) I decided not to be ridiculous, to just swallow my pride and to stop counting

SOftfroggie, Are you looking for live-in or live out? If live-out, she may have her own car. And coudn't you just pay her mileage to cover the cost of the car? I don't know what the going rate is, say 35p per mile? And she would be responsible for her own insurance. I'm not sure if you can do this. But, I know that my work gives an allowance for travel, as does DH's, so it must be legal. However, a nanny who lives out costs more, so this might be a self defeating suggestion.

Definitely live out, and it is quite common for nannies to use thier own car as you and Hatsoff suggest. However, while you can approach our house on a normal road (DH does this in a normal car), the fastest way to anything is up a track you could only contemplate in a 4x4 (honestly, you'd loose bits off your car in anything else). So it's either drive my 4x4, or spend an extra 30+ mins in the car on each journey. So, yes, big engine car with pricey insurance. I must call them for a quote for a potential nanny to see quite how painful it is.

I don't really mind not contributing anything to household budget (demoralising, but not a problem). Similar to Hatsoff, DH wouldn't dream of me depriving myself. I'd go off my trolley without some work, so worth it. Of course, there is the long term benefit of continuing to work - work now enables me to continue working when they're at school.

After all your helpful inputs, I must go and do the calculations....

Just called insurance co: between £50 and £350 depending on age and experience of nanny. Not too far off what I was expecting, but suprised by the huge range.

Its just age really.......mine is 29 and it costs about 30 a year to add her to the Audi.

£30/year is the insurance cost???? That's it? Surely I read that wrong...

Uwila - we mean the additional cost on top of insuring the car for us to drive.

Wow, still I would have thought it would be a lot more than that. That's nothing. I'm gonna get a nanny who can drop me off at work and then run errands with the kiddies, like the cleaners and the grocery store.

Yes, its about 30 on top, but we are both 39 and she is 29 so we are all old sensible farts.....

It is SO age-dependant. I got my insurance co to run several imaginary nannies through the system, the £50 extra was for a putative 32 year old with 9 yrs driving experience, own car and clean record. That's on a big-engined 4x4 in deepest countryside. Sadly, saving - say - £300 on insurance costs won't go far to giving a more expeienced nanny extra hourly wage. (about 10p extra net).

Hey, by any chance, did you ask the insurance company if it needed to be a uk license? Do EU licenses run more expensive?

And the good news is: I can pay my nanny £6ph net (which seems a reasonable going rate) and still make 77p net myself for every hour I work (assuming I only work my contracted hours ha bl**dy ha). Or pay him / her £6.33ph net and earn nothing (main reason for difference is paying nanny for 1.5hrs each day more than I work to cover lunch and handovers). I've even allowed for an extra 3hrs per week for nanny overtime to cover me to do a long day at meetings each week. Plus I gain the pension (this is net of pension contrib).
This depends TOTALLY on the £50 voucher scheme being available to both me and DH: at present neither company offer it. Might try negotiating for a pay rise!
Acutally, the biggest hit after nanny salary is the allowance for nanny lunches!

Uwila: I have 2 kids the same age gap as yours, just a little older, and I find running errands with the kiddies a pain in the neck. Coping with a loose toddler and a buggy, or a buggy and a sling, in a shop is quite a trick. Nearly made it out of Woolies the other day to find DS had shoplifted a handful of birthday cards with his favuorite character on them. I'd find it easier to run errands myself from work than to have stressed nanny from piling them on her / him.