Budgeting: Nanny cost: what you'll pay and how to budget
Nanny cost includes more than the hourly rate, since families who employ a nanny often pay taxes, holiday and extras too. In a worked example, a full-time nanny costs 2,600 a month in total, while a nanny share cuts that to 1,600.
By Wealtie Team · 3 min read
Key takeaways
- Nanny cost includes wages plus employer costs like taxes, holiday and extras.
- A full-time nanny is usually the most expensive childcare option for one child.
- A nanny share or part-time hours bring the cost down.
- With two or more children, a nanny can cost less than several nursery places.
What does a nanny cost?
A nanny looks after your children in your own home, often working full days that fit around your job. That flexibility and one-to-one care come at a price, and nanny cost is usually higher than other childcare for one child. The total also includes more than the wage. In many countries, families who hire a nanny become employers, which can mean paying taxes, holiday pay and pension contributions on top of the hourly rate.
Here's a worked example of monthly costs for one family, in round numbers that work in any currency:
| Option | Monthly cost |
|---|---|
| Part-time nanny, 3 days | 1,500 |
| Nanny share, full-time | 1,600 |
| Full-time nanny | 2,600 |
The full-time figure is made up of about 2,200 in wages and 400 in employer costs and extras. Rates vary a lot by city and experience, so get local quotes before you plan. The rules for employing a nanny also differ from country to country, so check what applies where you live.
What costs come on top of the wage?
Employer taxes and contributions
In many places, you'll need to register as an employer, run payroll and pay employer contributions. Some families use a payroll service, which adds a small monthly fee.
Holiday and sick pay
Nannies are usually entitled to paid holiday, including public holidays, and sometimes sick pay. You may need backup care when they're off.
Food, outings and activities
Lunches, snacks, classes, trips and travel during the day are usually paid by the family. A kitty of a set amount each week keeps it simple.
Car and travel costs
If the nanny drives your children, you may need to add them to your car insurance or pay mileage on their own car.
Insurance
Some families add employer's liability insurance or check their home insurance covers a nanny working there.
How can you make a nanny more affordable?
Nanny share
Two families share one nanny, either looking after the children together or splitting the week. Each family pays less than for a sole nanny, and the nanny often earns a little more overall. Agree in writing how costs, holidays and sick days are shared.
Part-time hours
If you or a partner work part-time, or grandparents can cover a day or two, a nanny for three days a week costs much less. How to save money on childcare covers combining different types of care.
Childcare support
Some countries offer tax relief, vouchers or funded hours that can be used towards registered childcare, sometimes including nannies. Check what you're eligible for.
Is a nanny cheaper than nursery?
For one child, nursery is usually cheaper. With two or more children, the sums can change. If nursery costs 1,400 a month per child, two children cost 2,800, while a full-time nanny at 2,600 covers both, and adds flexibility like no rush at drop-off and care when a child is mildly unwell.
| Two children | Monthly cost |
|---|---|
| Two nursery places | 2,800 |
| One full-time nanny | 2,600 |
Every family's numbers are different, so compare the total cost, including commuting time and the hours each option covers. How to budget for a second child covers the wider cost of a growing family.
How do you budget for a nanny?
Work out the full monthly cost
Add wages, employer costs, payroll fees, a weekly kitty and any travel. That total is what goes in your budget, not just the hourly rate times hours.
Plan for the annual costs
Holiday cover, a pay rise each year and a gift at the end of the year are easy to forget. Setting a little aside each month for them avoids surprises.
Check it against your take-home pay
Childcare is often one of the biggest costs for working parents. Comparing it with the second earner's take-home pay helps you see the full picture, though many families decide the long-term career benefits are worth a tight few years. The stay-at-home parent budget covers the other side of that choice.
It also helps to write a clear contract from the start, covering hours, pay, holiday, sick days, duties and notice periods. A written agreement protects both you and the nanny, avoids awkward conversations later and makes it easier to plan the cost, since you'll know exactly what you've committed to each month and each year.
How can Wealtie help you track childcare costs?
Add the nanny's wages and payroll fees as recurring transactions, so they appear in your budget every month. Log the kitty, activities and travel in their own expense categories, and you'll see the real monthly cost of childcare, not just the headline rate.
Questions people ask
Costs vary by location and experience. In a worked example, a full-time nanny costs about 2,600 a month including employer costs and extras.
On top of wages, families often pay employer taxes, holiday and sick pay, payroll fees, a food and activities kitty and travel costs.
Yes. Two families sharing one nanny each pay less than for a sole nanny. In a worked example, a share cost 1,600 a month instead of 2,600.
For one child, nursery is usually cheaper. With two or more children, a nanny can cost about the same or less than several nursery places.
This article is general information, not financial, tax or legal advice. Your situation is your own; check the numbers that apply to you before you act on them.
