Three figures that explain your budget
When you discuss a nanny’s salary, it helps to distinguish three amounts. Gross salary is pay before deductions. Net pay is what the nanny receives after deductions. Employer cost adds the family’s employer contributions to gross salary.
This guide covers the 2025/26 tax year, from 6 April 2025 to 5 April 2026. It uses illustrative salaries rather than a survey of London nanny rates. For a different year, select the relevant tax year in the calculator below.
Start with the working hours
For a year-round role with steady guaranteed hours, multiply the gross hourly rate by weekly hours and then by 52. For example, £20 gross per hour for 40 hours a week gives £41,600 annual gross salary. The £20 figure is an example, not a recommended or average market rate.
The annual calculation includes paid leave within the 52 weeks. Your wider budget may also need cover for times when your nanny is away. Term-time arrangements, changing schedules and overtime need their own agreed calculation.
Add the employer contributions
For the standard adult employee model used here, 2025/26 employer National Insurance is 15% of earnings above the £5,000 annual threshold. At £41,600 gross salary, the annualised estimate is £5,490.
With the calculator’s pension option enabled, employer pension is modelled at 3% of qualifying earnings between £6,240 and £50,270. In this example that adds £1,060.80, bringing estimated salary plus employer contributions to £48,150.80 a year, or £4,012.57 a month on average. Pension duties and scheme rules depend on the employment circumstances.
Understand what the nanny takes home
Under our example assumptions, estimated annual take-home pay is £32,057.20 with pension contributions enabled. The calculator deducts Income Tax, employee National Insurance and a modelled employee pension contribution. The nanny’s actual take-home pay depends on their circumstances.
The model assumes one job, the standard Personal Allowance, NI category A and a net pay pension arrangement, with no student loans, salary sacrifice or other income. It covers England, Wales and Northern Ireland. Scotland is not covered. Annualised estimates can differ from payroll figures because payroll uses pay-period thresholds and rounding.
Leave space for the other costs
The employer total shown does not include payroll services, insurance, agency fees, outings, travel or other agreed expenses. Add these separately to understand your full household budget. Discuss the working arrangements and gross salary clearly before making an offer.
Use the calculator to compare different hours and gross hourly rates. It is a planning estimate rather than a payslip calculation or individual tax advice. For help defining your role and finding a suitable nanny, book a free family introduction call.
For families & nannies · 2025/26
Understanding the cost of employing a nanny.
See the salary before deductions, the nanny’s estimated take-home pay and the family’s estimated employment cost together.
For a permanent position, families normally agree guaranteed weekly hours. Annual salary is calculated across all 52 weeks, including paid annual leave.
Gross hourly rate × guaranteed weekly hours × 52
| Salary & costs | Per year |
|---|---|
| Gross salaryBefore deductions | £41,600.00 |
| Estimated net payThe nanny’s take-home pay | £32,057.20 |
| Estimated employer costSalary + employer NI + employer pension | £48,150.80 |
View deductions & calculation assumptions
- Income Tax / year
- £5,452.40
- Employee National Insurance / year
- £2,322.40
- Employee pension / year
- £1,768.00
- Employer National Insurance / year
- £5,490.00
- Employer pension / year
- £1,060.80
2025/26 rates for England, Wales and Northern Ireland. One job, standard Personal Allowance (reduced above £100,000), NI category A, no student loans or other income. Scotland is not covered.
Pension model: 5% employee and 3% employer contributions on qualifying earnings (£6,240–£50,270), using a net pay arrangement. No salary sacrifice. Figures assume steady pay over a full tax year and are annualised; actual payroll rounding and pay-period thresholds may differ.
Sources: HMRC rates and thresholds · Workplace pension contributions.
Estimated take-home pay is a guide. Actual pay may vary depending on your tax code, pension scheme, student loan repayments, other income and circumstances. Employer costs shown exclude payroll services, insurance, agency fees and expenses. This is an estimate, not payroll or tax advice.
Sources: HMRC 2025/26 rates and thresholds · Pension earnings thresholds · Pension contributions