Everything Nannies Need to Know About Nanny Pay

The basics of nanny payroll services and pay

Before accepting any childcare position, make sure you understand the nanny payroll process and what your gross salary, net pay and tax obligations will look like.

In the UK, most families employing nannies pay a regular monthly salary through a nanny payroll provider or professional payroll service. This ensures compliance with UK employment law, income tax rules, and National Insurance contributions. Your employer must also handle Real Time Information reporting to HMRC, which covers your tax code, workplace pension setup and other deductions.

Some nannies are live-in and receive accommodation and meals as part of their overall pay package. Others are live-out, working set hours and paid an hourly or salaried rate. When calculating the total cost of employing a nanny, both sides should be clear about what’s included - for example, holiday pay, sick pay, pension contributions and maternity or shared parental leave entitlements.

If you’re a live-in nanny, your accommodation and meals will often be included as part of your overall salary package. For live-out nannies, pay is usually structured as an hourly or monthly rate based on your contracted hours. While many nannies will already be familiar with these arrangements from previous placements, it’s still worth double-checking how your pay is calculated, particularly whether benefits such as holiday pay, sick pay, pension contributions and maternity or shared parental leave entitlements are factored into your agreement.

Even when you know what to expect, understanding how your payroll is managed can make a big difference. If your employer uses a professional nanny payroll provider, you can feel confident that your tax, National Insurance (NI) contributions and pension scheme are being handled correctly and in line with UK employment law.

Talking about pay during the hiring process

Discussing pay early on is the best way to set clear expectations. The right time to raise this is during the interview process or when you receive a job offer, and before you accept. This helps both you and the family avoid confusion later.

You might want to ask about:

• Your gross salary or hourly rate.
• How often you’ll receive your pay.
• Whether holiday pay, sick pay or other entitlements are included.
• How pensions, deductions or job-related costs (like travel or meals) are handled.

Before negotiating, research nanny salaries in your area and think about what you bring to the role. Extra childcare qualifications, first aid training or experience with domestic staff can justify a higher rate. When you join our books here at Nannies Matter, we can advise you on salary expectations for the type of role you are looking at.

You can also confirm how your tax will be managed and whether your pension contributions are made through a workplace pension scheme. Once a figure is agreed, make sure your employment contract clearly states your pay, working hours and any benefits - it protects both you and your employer. Again, Nannies Matter can advise and often guide this part of the process.

When to ask for a pay review

As your role evolves and your experience grows, it is natural to consider the prospect of a pay raise. Regular pay reviews are typical in most professions, and nannying is no exception. It is reasonable to expect an annual review, but the specifics should ideally be outlined in your contract. Some families might conduct reviews after a probationary period, or in alignment with significant changes in the role, such as an increase in hours or additional responsibilities.

Avoid springing the conversation on your employer unexpectedly. Instead, request a meeting to discuss your role and compensation. This shows professionalism and respect for their time. Come to the meeting ready to discuss your achievements and contributions. Highlight moments where you have gone above and beyond, completed additional training or successfully managed challenging situations.

While your focus might be on a pay raise, this is also an opportunity to receive feedback. Being open to constructive criticism can demonstrate your commitment to professional growth and the wellbeing of the children in your care.

Factors that often influence pay raises include:

• Additional responsibilities: if your duties have expanded significantly since your initial contract, this should be reflected in your compensation.
• Further qualifications: additional training or qualifications that enhance your ability to care for the children should be considered when discussing a raise.
• Cost of living adjustments: inflation and changes in the cost of living can also be valid points in your discussion, especially if your pay has remained static for an extended period.

Even if the family can’t offer a raise immediately, use this opportunity to discuss your progress and agree on future goals. Maintaining open communication shows maturity and helps build long-term trust.

Dealing with late or incorrect payments

There may be times when issues arise with your pay. Knowing how to address these situations professionally and swiftly will help to maintain a positive working relationship. These issues can sometimes be caused by a tax code error, pension contribution adjustment or a simple administrative mistake by the payroll service.

Before approaching your employer, review your contract and any recent correspondence that might explain the discrepancy or delay. Keep detailed records of your work hours, agreed pay and any communication related to payment. This information can be invaluable if discrepancies arise.

If you notice a mistake or have not received your pay on time, bring this up with your employer as soon as possible. It is often best to address these issues in writing, providing a clear record of the conversation. Keep the communication factual, referencing specific details such as the agreed terms in your contract, the dates and hours worked and any previous relevant communication.

If repeated attempts to resolve the issue with your employer directly are unsuccessful, it may be time to seek external advice. A supportive agency like Nannies Matter offers employment advice to help you understand your options. As a last resort, this may include legal action, which you should not pursue without discussing your situation with the employment experts at Nannies Matter.

Dealing with late or incorrect payments can be stressful, but by approaching the situation with a clear, composed mindset and following the proper steps, you can work towards a fair resolution.

Employment law: protecting your rights

Every nanny working in the UK is protected by employment law. This includes your right to:

• Holiday pay and sick pay.
• Maternity leave or shared parental leave.
• Workplace pension enrolment and pension contributions.
• Accurate tax and NI management.
• Regular, itemised payslips.

Understanding your entitlements helps you recognise when something doesn’t seem right. If you ever feel unsure, you should seek help from your nanny employment service. When you work with Nannies Matter, we will always be available to discuss these types of issues with you around employment law and advise on best practices.

Get in touch

If you find yourself unsure about any aspect of your pay, from the value of your annual salary to tax payments and disputes that may arise, speak to Nannies Matter. We help to pair nannies with families that match their goals and skills, and this extends to offering advice on how to be employable, but also how to get the most out of your role. To learn more, call us today on 07736 337065, or fill out an online contact form and we will be in touch at a time suitable for you.