Gross v Net Nanny Salaries

Almost all UK industries quote and pay in gross terms, but for the nanny industry this sometimes does not happen. Many years ago, for some reason, nannies and families starting to discuss wages in net terms, and as it was easier for the Nanny to understand what they were going to take home after tax and National Insurance contributions, and it stuck. The issue is, if you agree a Net salary, it is confusing for the employer, as it does not represent the true and total cost of employing a Nanny. This then gets confusing for all involved.

How a Gross Salary benefits a Nanny Employer

-Helps the employer to budget for the salary they are offering, as it includes the additional costs of tax, National Insurance and pension contributions.

-It protects the employer from becoming liable for any of the nanny’s unpaid tax from previous employment or other deductions like student loans.

-Confirms the nanny is paying their side of the pension contributions.

How a Gross Salary benefits a Nanny

-Gives Nannies the opportunity to compare their salary with other childcare positions and fields as almost all other industries discuss in Gross terms.

-Simplifies information on salaries when taking out a mortgage or loan, as the lender will want to see proof of income in Gross terms.

-Helps the Nanny benefit from their tax-free allowance which usually increases in April. If you agree a net salary, the employer will benefit from the increase instead of the Nanny.

-Is more professional and employers will have a better understanding when you are negotiating salaries.

At the Nanny Connection we support the #GOGROSS campaign introduced by Nalo Nannies, which highlights the benefits of Gross vs Net, and always recommend that families agree a Gross salary with their nanny. If you need any other calculations, like the Total Cost calculation if you are an employer or the net calculation if you are a Nanny, do visit Nannytax’s website which has a brilliant tax calculator. (https://www.nannytax.co.uk)