If you’ve narrowed down your choice of childcare options and decided that hiring a nanny is the right option for your family, you’re probably wondering: Can we even afford a nanny? As with any childcare option a parent considers, it’s crucial to know up front what it’s going to cost so you can look at your budget and plan accordingly.
How much is a nanny?
According to The Nanny Salary Index 21/22, live-out nannies in Greater London earn an average gross wage of £15.31 an hour or £39,806.00 a year. This is up around 8% since 20/21, which can be attributed to increased demand as the government urges people back to work following the peak of Covid.
You can find most current average rates for nannies, depending on location and number of children, with our cost of childcare calculator. But there are several other factors to keep in mind when discussing a nanny’s pay rate, not least of all The National Minimum Wage.
What should I factor into a nanny’s pay rate?
The cost of hiring a nanny has many variables, including where you live, what the nanny is hired to do and how much experience they bring to the position.
Geographic area
One of the biggest factors in how much you’ll pay for a nanny is where you live. Hourly rates for nannies vary widely from one community to the next. Those living in areas with a higher cost of living generally pay more for nanny services than in lower-priced areas. Competition can also be a factor. Cities with fewer experienced, well-qualified nannies will pay them more than in places where competition isn’t quite so fierce. To give you a general idea, here are some factors that nannies take into consideration when setting their rates.
Current nanny rates for top cities*
| CITY | HOURLY NANNY RATE |
| London | GBP 13,09 |
| Birmingham | GBP 11,82 |
| Glasgow | GBP 11,67 |
| Liverpool | GBP 11,94 |
| Bristol | GBP 11,85 |
| Manchester | GBP 12,11 |
| Sheffield | GBP 11,54 |
| Leeds | GBP 11,48 |
| Edinburgh | GBP 11,48 |
| Leicester | GBP 12,06 |
Beyond cost of living, commuting can also play a role. For instance, if the nanny has to commute, they will be taking into consideration the cost of their time in transit and mileage, especially if the hours are part-time.
Looking up average nanny rates for your area is good starting place and you can always go up or down based on expected duties or the nanny’s experience.
Types of duties and tasks
In addition to where you live, what you’re asking the nanny to do could also affect how much you’ll pay. Caring for more children, for example, usually means more work for the nanny, and therefore can mean a higher pay rate.
The specific tasks included in the job description of a nanny can change from one family to the next. Hiring a nanny is about making a family’s life easier. That can mean things like party organisation, food shopping, planning schedules–it can be a lot of hats for one person.
Circumstances that might make the price of nanny services go up or down include:
- Number of children.
- Ages of the children.
- Driving to and from activities–typically covered in the form of using a household vehicle or paying the nanny a mileage reimbursement if they have to use their own car.
- Household tasks, such as cooking, laundry, cleaning or dog-walking.
- Errands like food shopping or picking up the dry cleaning.
- Managing contractors or other household employees.
- Event planning.
How much more a nanny should earn for these non-childcare tasks is between the family and the nanny, and it should be something that’s discussed during routine pay assessments and written down in a nanny contract or worker’s agreement.
For those at a loss for what would be appropriate, however, it’s fairly standard practice to consider adding a little to the hourly rate for common household tasks like meals or laundry for the whole family.
Experience and background of the nanny
If families are looking for someone with a lot of training or background in a specific area, they should be prepared to pay more for that experience.
Nannies with a bachelor and master’s degree, especially related to early childhood education, typically have a higher earning potential. Nannies with specialised training or experience with niche circumstances, such as caring for multiple children or children with special needs, also earn more. The best idea is to have a think first about exactly what you need in a nanny so you can write a wish list and go from there.
What extra costs are not included in a nanny’s pay rate?
How much you pay your nanny is only part of the equation. When you’re budgeting for nanny services, you should also take into consideration other costs, like nanny taxes, background checks and supplemental care when your nanny is sick or on holiday. These additional expenses include:
- Nanny taxes: According to gov.uk, nannies (full-time or not) are employees–not independent contractors–meaning families are responsible for withholding tax and National Insurance contributions. Nanny taxes kick in when the nanny makes more than £12,570 per year. If you aren’t sure how much tax your nanny should be paying, this nanny tax calculator can give you an idea.
- Payroll services: Some families opt to use a payroll service or accountant to manage the nanny’s pay-check and nanny taxes, which can also be an added cost.
- Intermediary agencies: If you hire a nanny through a nanny agency, these organisations will generally charge fees to vet and recommend nannies for you.
- Periodic background checks: Background checks for nannies prior to hiring them on, as well as on an annual or routine basis, are also an added cost. An enhanced check is recommended for those working with children.
- Additional certifications: Families who ask that their nannies be up-to-date on CPR and first aid certifications will often pay for them to be renewed every few years.
- Raises, bonuses and overtime: Like many different types of employees, nannies expect to receive routine raises and/or bonuses and may be entitled to overtime pay if they work more than 48 hours per week. How much you should give in raises or bonuses is between you and your nanny, but a 2.8% increase was standard in 2022 in the UK.
- Supplemental childcare: Remember that your nanny will likely be entitled to paid time off–in the UK, almost all workers are legally entitled to 5.6 weeks’ paid holiday a year. You can check how much your nanny would be entitled to here. During that time, families might need to pay for supplemental, short-term childcare, such as an emergency babysitter or drop-in childcare, if family members are unable to fill in.
How much a nanny costs can differ widely from one family to the next, based on circumstances, expectations and experience levels. Families interested in hiring a nanny should start by looking into the costs of nannies in their area and taxes for their area and adjust their budget from there.
