Due to increasing childcare costs, nanny shares have risen in popularity during recent years. Indeed, using a nanny share can realise substantial savings compared to other childcare costs e.g. a childminder will charge around £5.00 per hour per child; a sole charge nanny comfortably earn £18,000 gross per annum; and a nursery place cost in the region of £170 per week.
Financial savings aside, nanny shares can prove a cost effective solution offering flexible and part time solutions that additionally enable parents to maintain some control of the day-to-day care of their children and share the responsibility of childcare between families.
In order to maximise benefit and make a nanny share work effectively, parents should ensure (among each family, if necessary) that:
- the nanny is formally registered as an employee;
- a gross annual salary is formally agreed and documented in a contract of employment with the nanny. Ideally the salary will be set at an hourly- or daily-rate for a nanny share in order to facilitate the correct apportionment of salary dependent on hours worked and amount of children looked after. Where the nanny is shared between families, technically the first family would gain the full benefit of the nanny’s tax free allowance with subsequent families paying tax at the basic rate (22%); however, in reality, the joint total cost would be calculated and broken down to ensure that tax liabilities are evenly apportioned (see advice from an organisation such as Way2Paye for more advice on this);
- holidays are agreed in advance to avoid conflicts; and
- separate agreements as components of the contract are drafted to reflect each family’s differing requirements.
Salaries should be based on a number of factors but at the very least accurately reflect qualification, experience, duties and responsibility. Nannylink Ltd can help on a consultancy basis to advise families on salary guidance and all related matters. As a rule of thumb, at current rates a sole charge nanny working full time for one family will command an hourly salary of £7 -£13.00 gross per hour or £18,000- £35,000 gross per annum. A shared nanny working full time for two families will command an hourly salary from £8.50-£13.50 gross per hour.
Nannies with their own child(ren)
These are normally experienced and qualified nannies who work in their employer’s home looking after the employer’s child(ren) and their own. The benefits of such an arrangement are that:
- the nanny maintains the familiar environment and routine of the employer’s family;
- the employer’s child(ren) benefit from another similarly aged playmate;
- salaries and hours are generally more flexible and negotiable; and
- the nanny will understand and naturally exhibit a mother’s tendencies because she is at the same time responsible for her own child(ren).
As a final note, it is critically important that each parents carries out their own risk assessments for the particular circumstances in which the nanny is employed e.g. where babies and toddlers are being cared for, parents should ensure that stair gates are available and potential hazards are removed to reduce risk and potential for harm as well as meet insurance requirements .
We hope this provides food for thought and a useful introduction to nanny shares. For more information, please contact us.