When you hire a nanny, you become their employer, with the same core duties as any employer: checking the right to work, a written statement, payroll, a workplace pension, the minimum wage, holiday and sick pay.
On a £40,000 gross salary, employer National Insurance and the minimum pension contribution bring the yearly cost to £46,262.80.
How to hire a nanny: the steps in order
The steps, in order, each with its source:
1. Check they have the right to work in the UK
You must check that a job applicant is allowed to work for you in the UK before you employ them. If you employ an illegal worker without a correct check, you could face a civil penalty (GOV.UK).
2. Agree the pay, in gross terms
The minimum wage from April 2026 is £12.71 an hour at 21 and over, and £10.85 at 18 to 20.
A live-in nanny treated as one of the family is still entitled to the minimum wage; members of your own family living in your home aren't. If you provide accommodation free, £11.10 a day (£77.70 a week) is added to their pay for minimum wage purposes (GOV.UK). Compare live-in rules in Spain and the US.
Agree pay as a gross figure. If you agree net pay instead, the gross is higher: £30,000 a year net needs about £36,778 gross (tax code 1257L, no pension or student loan). See what nannies earn. Weighing an au pair instead? See how the two compare.
3. Give a written statement on day one
You must give your nanny a written statement on their first day. Among other things, it includes your name, their name, job title or description and start date, how much and how often they're paid, their hours and days of work, holiday entitlement and where they'll work. The wider written statement follows within two months.
4. Register as an employer and run payroll
You must register for PAYE if your nanny is paid £96 or more a week, or one of HMRC's other conditions applies. Register before the first payday to get your employer PAYE reference; you can't register more than two months before you start paying. If you don't need to register, you still need to keep payroll records.
Nanny payroll runs each time you pay: use payroll software to record pay, work out tax and National Insurance, produce a payslip and report pay and deductions to HMRC in a Full Payment Submission. Pay HMRC by the 22nd of the next tax month (the 19th by post). Keep payroll records for 3 years from the end of the tax year they relate to; if you don't keep full records, HMRC can charge a penalty of up to £3,000.
For 2026/27, employer National Insurance is 15% on earnings above £5,000 a year. If your nanny is under 21, it's 0% on earnings up to £50,270 a year and 15% above that.
You can't claim the Employment Allowance for a nanny or other household worker unless they're a carer or support worker.
5. Set up a workplace pension
Employing a nanny is one of The Pensions Regulator's examples of being an employer, and your automatic enrolment duties begin on the day your first member of staff starts work (The Pensions Regulator).
You must enrol a nanny who is aged 22 up to State Pension age, earns at least £10,000 a year and usually works in the UK. The minimum nanny pension contributions are 3% from you and 5% from the nanny, usually on earnings between £6,240 and £50,270 a year. Every employer must also complete a declaration of compliance with The Pensions Regulator.
6. Holiday, sick pay and hours
Almost all workers get 5.6 weeks' paid holiday a year: for a five-day week, at least 28 days, and you can include bank holidays. Statutory Sick Pay is £123.25 a week or 80% of average weekly earnings, whichever is lower, for up to 28 weeks.
In Great Britain, the 48-hour average weekly limit doesn't apply to a worker employed as a domestic servant in a private household (reg. 19), but daily rest, weekly rest and rest breaks usually still do (GOV.UK).
Ofsted registration and Tax-Free Childcare
In England, nannies don't have to register with Ofsted, but can choose to, and registration helps parents qualify for help with childcare costs (GOV.UK).
With Tax-Free Childcare, if you're eligible (you'll usually need to be working), the government adds £2 for every £8 you pay in, up to £2,000 a year per child (£4,000 if disabled), for children aged 11 or under (16 or under if disabled). The nanny must be registered and signed up to the scheme.
An Ofsted registered nanny needs an enhanced DBS check with barred lists, first aid training, childcare training and public liability insurance, and registration costs £103 (GOV.UK).
Registered or not, a nanny can look after children from one or two families at any one time, in one of those families' homes; looking after more means registering as a childminder. That matters if you're planning a nanny share.
What a nanny costs on top of salary
| Gross salary | Employer National Insurance | Employer pension (3% minimum) | Total a year |
|---|---|---|---|
| £33,046 (minimum wage, 50 hours a week) | £4,206.90 | £804.18 | £38,057.08 |
| £40,000 | £5,250.00 | £1,012.80 | £46,262.80 |
| £45,656 (one payroll provider's 2026 UK average) | £6,098.40 | £1,182.48 | £52,936.88 |
| £50,000 | £6,750.00 | £1,312.80 | £58,062.80 |
Employer National Insurance is 15% above £5,000 a year; the pension is 3% of earnings between £6,240 and £50,270, assuming your nanny is enrolled. The table doesn't include payroll software or service costs, holiday cover, or anything for accommodation. For what nannies take home, see our nanny salary guide.
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FAQ
Do I need to register as an employer to hire a nanny?
Yes, if your nanny is paid £96 or more a week or one of HMRC's other conditions applies, and before the first payday. If not, you still need to keep payroll records.
Can I claim the Employment Allowance for a nanny?
No, unless they're a carer or support worker.
Does my nanny have to be registered with Ofsted?
No, it's voluntary, but registration helps parents qualify for help such as Tax-Free Childcare.
Do I have to put my nanny in a pension?
Yes, if they're aged 22 up to State Pension age, earn at least £10,000 a year and usually work in the UK.
Last reviewed: 21 October 2026. Rules and rates as at 21 October 2026, summarised from GOV.UK and The Pensions Regulator; this isn't legal or tax advice.
