How Much Does a Nanny Cost?

The total cost of a nanny is their gross salary plus all employer costs (Employer's National Insurance and pension), which typically adds an extra 15-25% on top. Average gross hourly rates vary hugely by location, from around £14.75/hour in Scotland to over £19.50/hour in London.

This is the number one question every family asks, and the answer is more complex than just an hourly rate. The price you see advertised is not the final price you will pay.

When you hire a nanny, you are an employer. This means the "total employer cost" is the figure you must budget for. This total cost is made up of two parts:

1. The Nanny's Gross Salary (the amount you agree on).
2. The "On-Top" Employer Costs (the tax and pension you pay).

This guide will break down both parts so you can build a realistic budget.

1. The Nanny's Gross Salary

This is the starting point. It's the full amount you agree to pay your nanny before any deductions. This salary depends on several key factors.

Location, Location, Location

Where you live is the biggest driver of cost. Childcare in London and the South East is significantly more expensive than in the Midlands or the North.

Here are the average gross hourly rates for a nanny across the UK:

• London: £19.51
• West Midlands: £17.84
• East of England: £17.02
• North West: £16.92
• South West: £16.68
• South East: £16.60
• Yorkshire & the Humber: £16.37
• East Midlands: £15.08
• North East: £14.87
• Scotland: £14.75
• Wales: £14.37
• Northern Ireland: £12.97

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Live-in vs. Live-out

• Live-Out Nanny: This is the most common arrangement. Their gross salary is higher as they have their own living and commuting costs.
• Live-In Nanny: A live-in nanny receives a lower gross salary because they receive the benefit of accommodation and (usually) meals. However, you must still pay them at least the National Minimum Wage and handle complex payroll deductions for their accommodation.

Learn more : Live In VS. Live Out Nanny

Experience and Qualifications

A highly-qualified nanny with 10 years of experience, glowing references, and an Ofsted registration will command a higher salary than a junior nanny just starting their career.

2. The "On-Top" Costs: What You Actually Pay

This is the part that catches most new employers by surprise. Your legal duties as an employer add a significant, non-optional cost on top of the gross salary.

Employer's National Insurance

This is a tax you, the employer, pay to HMRC. It is not the same as the National Insurance your nanny pays.

As of 2025/26, you must pay 13.8% on all your nanny's earnings above the "Secondary Threshold" (currently £9,100 per year, or £175 per week). This can add thousands of pounds per year to your bill.

See the current rates here

Workplace Pension

By law, you must enrol your eligible nanny into a workplace pension.

• Your Contribution: You must pay a minimum employer contribution of 3% of their "qualifying earnings" (earnings between £6,240 and £50,270 per year).
• Your Nanny's Contribution: Your nanny will contribute 5% (this comes out of their gross salary).

The "Gross vs. Net" Trap

This is why you must always agree on a gross salary. If you agree to a net (take-home) figure, you are responsible for paying all the tax, all the NI (theirs and yours), and all the pension (theirs and yours). If their tax code changes, your costs could spiral.

Example: The True Cost of a Nanny

Let's see how this works in practice.

You live in the South East and hire a nanny for 40 hours per week at the average rate of £16.60/hour.

1. Annual Gross Salary:£16.60/hour x 40 hours/week x 52 weeks = £34,528
2. Employer Costs (Estimates):
   • Employer's NI: (13.8% on earnings above £9,100) = ~£3,509
   • Employer's Pension: (3% on earnings between £6,240 & £50,270) = ~£849
3. Total Annual Cost to You:£34,528 (Salary) + £3,509 (NI) + £849 (Pension) = £38,886

In this example, the "on-top" costs add £4,358 (over 12.5%) to the salary you agreed.

Want to run your own numbers?
‍Use our Nanny Salary Calculator to see the full employer cost for any gross salary, instantly.

3. Other Costs to Budget For

Finally, don't forget these smaller, regular costs:

• Employer's Liability Insurance: A legal must-have, usually added to your home insurance.
• Nanny Expenses: A "kitty" or petty cash for activities, meals, and mileage while your nanny is on duty.
• Ofsted Registration: If you want to use Tax-Free Childcare, your nanny must be registered with Ofsted. It's standard for the employer to pay the £103 annual fee.
• Payroll Service: The cost of hiring a service to handle all the complex payroll, tax, and pension admin.

It's a lot, but it can be simple

Figuring out the total cost, registering as an employer, and managing the legal side of payroll is complex. That's why we built Quinn.

Our payroll service takes care of everything for you: From registrations and filings to payslips and payments. We handle the maths and the admin, so you can be a confident, compliant employer. Fully digital, no paperwork, no stress.