Agreeing a Net or a Gross Wage
Many nanny jobs are advertised as a net weekly or monthly figure. That is common, but it leaves the family carrying every tax change: if NI or a tax code changes, the gross needed to hold the same net moves too.
- Gross agreement: the contract states a gross salary. The nanny's take home pay moves with their tax code and any student loan.
- Net agreement: the family guarantees a take home figure. It still has to report a gross salary to HMRC, and the gross is what counts for the nanny's mortgage applications and benefits.
Writing a gross figure in the contract is clearer for both sides. The calculator converts either way.
The Family as an Employer
A nanny who works in your home is your employee, not self-employed, in almost every case. The family registers with HMRC as an employer, runs PAYE through payroll software or a nanny payroll service, and sends a Full Payment Submission each payday.
Employer duties include payslips, statutory sick pay and maternity pay, holiday pay, and pay at least equal to the National Living Wage of £12.71 an hour for those aged 21 and over from 1 April 2026.
Employer National Insurance on Nanny Pay
The family pays 15% on everything above £5,000 a year, £96 a week. Businesses can knock up to £10,500 off their employer NI with the Employment Allowance, but GOV.UK rules it out for someone employed for personal, household or domestic work, naming nannies and gardeners. Carers and support workers are the exception.
On a £30,000 gross salary the family pays £3,750 of employer NI a year: (£30,000 − £5,000) × 15%.
Nanny Pension and Auto Enrolment
A nanny aged 22 or over who earns more than £10,000 a year must be put into a workplace pension. The legal minimum is 8% of qualifying earnings, the slice between £6,240 and £50,270:
- The family pays 3%.
- The nanny pays 5%. Under relief at source, as NEST runs it, 4% comes from net pay and the government adds the other 1%.
On £30,000 gross, qualifying earnings are £23,760. The nanny's contribution is £950.40 a year from net pay and the family's is £712.80. Untick the pension box if the nanny has opted out or is under the age limit; the same £2,200 net then costs £2,648.19 gross a month.
Worked Example from a Net Wage
Agreed net: £2,200 a month, £26,400 a year, with the pension.
| Item | Per year | Per month |
|---|---|---|
| Gross salary | £33,280.59 | £2,773.38 |
| Income tax (PAYE) | £4,142.12 | £345.18 |
| Employee National Insurance | £1,656.85 | £138.07 |
| Nanny pension (from net) | £1,081.62 | £90.14 |
| Net to the nanny | £26,400 | £2,200 |
| Employer NI | £4,242.09 | £353.51 |
| Employer pension | £811.22 | £67.60 |
| Total cost to the family | £38,333.90 | £3,194.49 |
The family pays £11,933.89 a year on top of the agreed net, which is 45.2% more than the nanny receives.
Weekly Nanny Pay: Net, Gross and Cost
| Net a week | Gross a week | Employer NI a week | Family cost a week |
|---|---|---|---|
| £400 | £481.64 | £57.82 | £550.31 |
| £500 | £628.70 | £79.88 | £723.84 |
| £600 | £775.76 | £101.94 | £897.37 |
| £700 | £922.82 | £124 | £1,070.90 |
Figures include the minimum pension. A nanny on £500 net a week costs the family £37,639.77 over a year.
Nanny Shares, Second Jobs and Tax Codes
In a nanny share each family is a separate employer. Each runs its own payroll and pays its own employer NI, and both get the £5,000 secondary threshold. The nanny usually has 1257L with one family and code BR (all at 20%) with the other.
The calculator assumes one job on 1257L. If this is a second job on BR, every pound is taxed at 20% and take home pay is lower than shown.
Assumptions, Limits and Sources
- Tax year 2026/27, full year, one employer, NI category A.
- No Employment Allowance, because the job is domestic work.
- Pension at the legal minimum through relief at source; the family may choose a better scheme.
- No student loan; add one on the UK Gross to Net Calculator if needed.
Sources: HMRC Rates and thresholds for employers 2026 to 2027, GOV.UK Employment Allowance eligibility and Workplace pensions contributions, and the DWP auto-enrolment thresholds review for 2026/27. Rates for 2026.
Frequently Asked Questions
Can a family claim Employment Allowance for a nanny?
No. GOV.UK excludes people employed for personal, household or domestic work, including nannies. Carers and support workers are the exception.
How much employer NI does a family pay for a nanny?
15% of gross pay above £5,000 a year. On £30,000 that is £3,750.
Do I have to give my nanny a pension?
Yes, if they are 22 or over, under State Pension age and earn more than £10,000 a year. The family pays at least 3% of qualifying earnings.
What gross salary gives a nanny £500 a week net?
About £628.70 a week gross with the minimum pension, or £32,692.35 a year.
Is a nanny self-employed?
Rarely. A nanny who works in your home to your routine is almost always your employee, and HMRC expects you to run payroll.
Should the contract say net or gross?
Gross is safer for the family, because the cost then does not change when the nanny's tax code changes. Net is common but puts every change on the employer.