Reviewed by Mustafa Bilgic
Founder, WebCalculator
Employer NI (15%, £5,000 threshold), auto-enrolment bands and PAYE rules per HMRC and GOV.UK for 2026/27. Not financial or legal advice.
The nanny tax calculator shows the full cost of employing a nanny in the UK for 2026/27. Enter your nanny's gross annual salary and see the Income Tax, employee NI, employer NI and pension contributions — plus the total you pay as an employer compared to what the nanny takes home.
Gross salary → full employer cost
Hiring a nanny is not like booking a childminder. You are the employer, which means PAYE, National Insurance and pension obligations sit with you. The real cost breaks down as:
For a nanny on £25,000 gross the employer NI is roughly £3,000 and pension about £563 — making the total employer cost around £28,563 a year, or £2,380 a month.
Before your nanny starts, you must:
Many families use a dedicated nanny payroll service (typically £100–£200 a year) to handle RTI submissions and payslips.
With auto-enrolment pension, 2026/27:
| Nanny gross | Employer NI | Employer pen. | Total cost |
|---|---|---|---|
| £20,000 | £2,250 | £413 | £22,663 |
| £25,000 | £3,000 | £563 | £28,563 |
| £30,000 | £3,750 | £713 | £34,463 |
| £35,000 | £4,500 | £863 | £40,363 |
The employer cost calculator covers any employee, not just nannies. The Tax-Free Childcare calculator shows how much the government tops up. For your own pay, try the salary calculator.
On top of the nanny's gross salary you pay employer National Insurance at 15% on earnings above £5,000 a year (2026/27) and a minimum 3% employer pension contribution if the nanny qualifies for auto-enrolment. For a nanny on £25,000 gross, employer NI is about £3,000 and pension roughly £750, bringing the total employer cost to around £28,750 a year.
Yes. A nanny is your employee, not self-employed. You must register as an employer with HMRC, run PAYE payroll each pay period, deduct Income Tax and employee NI, pay employer NI, and file Real Time Information (RTI) submissions. Many parents use a nanny payroll service to handle this.
Employer NI is 15% on the nanny's earnings above the secondary threshold of £5,000 per year (2026/27). There is no upper limit — the 15% rate applies on all earnings above £5,000. If you qualify for the Employment Allowance (£10,500) it can offset some or all of this.
Possibly. The Employment Allowance lets eligible employers offset up to £10,500 a year against their employer NI bill. However, you cannot claim it if the nanny is the only employee and the work is for personal, household or domestic purposes. If you employ other staff or have a business, you may qualify.
If your nanny earns more than £10,000 a year and is aged between 22 and State Pension age, you must auto-enrol them into a workplace pension. The minimum contributions are 3% employer and 5% employee (8% total) on qualifying earnings between £6,240 and £50,270 for 2026/27.
Almost never. HMRC treats a nanny who works set hours in your home, follows your instructions and uses your equipment as an employee. Hiring a nanny as self-employed when HMRC considers them employed can lead to penalties, back-taxes and NI.