Nanny Tax Calculator
What employing a nanny costs in 2026/27: gross or net pay, employer NI, workplace pension and minimum wage. No Employment Allowance for nannies.
If you hire a nanny yourself, you are their employer. On top of their gross pay you pay employer National Insurance at 15% on pay above £96 a week (£417 a month), plus at least 3% of qualifying earnings into a workplace pension for most nannies. The Employment Allowance, which cuts employer NI for eligible businesses, does not apply to a nanny. Enter the pay you have agreed, gross or net, to see the full cost and the nanny's take-home in 2026/27.
Enter the pay and press the button.
Employer National Insurance, and why there is no Employment Allowance
National Insurance is worked out on each payday, against HMRC's thresholds for that pay period, not on the year (HMRC rates and thresholds for employers 2026/27):
| Threshold | A week | A month | What happens above it |
|---|---|---|---|
| Lower earnings limit | £129 | £559 | gov.uk's figure for registering as an employer, but see the secondary threshold below |
| Secondary threshold | £96 | £417 | You pay employer NI at 15% |
| Primary threshold | £242 | £1,048 | The nanny pays 8% |
| Upper earnings limit | £967 | £4,189 | The nanny pays 2% on the rest; you still pay 15% |
Two age rules change the bill. For a nanny under 21 (category M) you pay no employer NI on pay up to £967 a week (£4,189 a month). For a nanny over State Pension age (category C) the nanny pays no NI, but you still pay employer NI (gov.uk category letters).
Employment Allowance does not help. Eligible employers can take up to £10,500 a year off their employer NI, but gov.uk lists among the employees you cannot include "someone you employ for personal, household or domestic work (like a nanny or gardener) - unless they're a care or support worker" (gov.uk Employment Allowance). The law is section 2(3) of the National Insurance Contributions Act 2014: employer NI for someone employed "for purposes connected with P's personal, family or household affairs" is excluded. Section 2(3A) lets it back in only where all of those household duties are done for someone who needs them because of old age, mental or physical disability, past or present dependence on alcohol or drugs, past or present illness, or past or present mental disorder. A nanny caring for children in the ordinary way is outside that, so every pound of employer NI on this page is a real cost. Our Employment Allowance guide covers who can claim.
Workplace pension duties for a nanny
Auto-enrolment applies to a family employing a nanny as it does to any employer. You must enrol a nanny aged at least 22 and under State Pension age who is paid more than the earnings trigger (Pensions Act 2008, s.3), and pay at least 3% of their qualifying earnings, with 8% going in altogether, on the qualifying-earnings basis (s.20(1)(b)-(c); gov.uk workplace pensions). Qualifying earnings are pay between the lower and upper levels below. These are the pension thresholds, set by the Department for Work and Pensions, and the lower one is not the NI lower earnings limit (The Pensions Regulator, 2026/27 table):
| 2026/27 | A year | A week | A month |
|---|---|---|---|
| Lower level of qualifying earnings | £6,240 | £120 | £520 |
| Earnings trigger for automatic enrolment | £10,000 | £192 | £833 |
| Upper level of qualifying earnings | £50,270 | £967 | £4,189 |
- Aged 16 to 21 or State Pension age to 74 and paid above the lower level, or aged 22 to State Pension age and paid above the lower level but not above the trigger: you do not have to enrol them, but if they ask to join you must enrol them (s.7) in a qualifying scheme, so the same minimums apply (s.20).
- Aged 16 to 74 and paid at or below the lower level: they can ask to join a pension; you do not have to contribute (s.9). You may contribute voluntarily, with no minimum. For 2026/27 that is pay of £120 a week or £520 a month or less.
- Tax relief. The nanny's 5% includes tax relief. Under relief at source it comes out of pay after tax and the provider adds basic-rate relief, so gov.uk's example is "you put in £40, your employer puts in £30, you get £10 tax relief". Under a net pay arrangement it comes out before tax. The calculator handles both.
The figures here are the Great Britain thresholds. In Northern Ireland the duties come from the parallel Pensions (No. 2) Act (Northern Ireland) 2008. More on the scheme itself in our auto-enrolment guide.
Minimum wage, live-in nannies and holiday
A nanny must be paid at least the minimum wage for their age: £12.71 an hour at 21 and over, £10.85 at 18 to 20 and £8.00 under 18, in 2026/27 (HMRC). Check it against every hour you ask the nanny to work, including any babysitting. Apprentice rates are not modelled by the calculator.
Live-in nannies are covered. Regulation 57 of the National Minimum Wage Regulations 2015 excludes work for a family household only where the worker is a member of the employer's family, lives in the family home and shares in the family's tasks and activities. Until 31 March 2024 a second test, in regulation 57(3), also excluded a worker who was not family but was treated as such, with free board and lodging. That paragraph was omitted from 1 April 2024 by SI 2024/75, reg 2, so a live-in nanny who is not a relative is entitled to the minimum wage.
Free accommodation counts towards minimum wage pay at the offset rate: £11.10 a day, £77.70 a week, in 2026/27. If you charge for the room, anything above the offset is taken off pay for the check. Food, a car and other benefits do not count (gov.uk accommodation offset). Full rules in our minimum wage employer guide.
Holiday. Almost all workers get 5.6 weeks' paid holiday a year, which is 28 days for a five-day week, capped at 28 days, and you can count bank holidays within it (gov.uk holiday entitlement). The figures above assume the same pay every week of the year, holidays included, so holiday pay is already in the annual cost. Cover while your nanny is away is extra. See our holiday pay guide.
Payroll, and what else you must do
You are usually the employer of a nanny you hire who is not self-employed or paid through an agency, and you cannot ask them to become self-employed. gov.uk says you must check they can work in the UK, have employers' liability insurance, register as an employer, run payroll (or pay someone to) "even if you pay the employee in cash", deduct their Income Tax and NI, and pay statutory pay such as maternity and sick pay (gov.uk employing someone to work in your home).
HMRC's registration page says you need to register if you pay an employee £129 or more a week, if they have another job or a pension, or if you give them expenses or benefits, and that most employers then send payroll information to HMRC online. You may be exempt from reporting online if, for example, you are getting care or support services for yourself or a family member (gov.uk register as an employer). The £129 figure is not the whole story. Employer NI is due on pay above the secondary threshold, £96 a week or £417 a month (SSCBA 1992 s.6(1)(b)), and HMRC says employers "will now need to submit RTI returns if any of their employees earn above the Secondary Threshold" (HMRC policy paper on the secondary threshold change). So if you pay between the two, register and run payroll. Step by step: our guide to registering and running payroll.
If you are eligible for Tax-Free Childcare and your nanny is registered, you can use the childcare account to pay the nanny's Income Tax and NI as well as their wages. Check your figures with our Tax-Free Childcare calculator. For what nannies earn across the market, see nanny salary and take-home pay.
Worked examples
A full-time nanny on £2,800 a month gross
Tax code 1257L, aged 22 to State Pension age, pension at the minimum by relief at source. The nanny pays £350.35 Income Tax, £140.16 NI and £91.20 into the pension, taking home £2,218.29 a month. You pay £357.45 employer NI (£2,800 less £417, at 15%) and £68.40 into the pension (3% of £2,280.00 qualifying earnings). Total cost £3,225.85 a month, £38,710.20 a year.
An agreed net wage of £550 a week
Same nanny, paid weekly. To leave £550 after deductions the payslip needs £702.15 gross, and the week costs you £810.53. If the nanny then turns out to have a Plan 2 student loan, keeping the net at £550 needs £722.74 gross, and your weekly cost rises to £834.83: that is the risk of agreeing net.
A live-in nanny aged 19
£400 a week for 40 hours is £10.00 an hour against a minimum of £10.85. With free accommodation seven days a week the offset adds £77.70, giving £11.94 an hour for the minimum wage check. Because the nanny is under 21, you pay no employer NI at this pay. They are not automatically enrolled in a pension, but can opt in.
Each figure is computed by the calculator above from the 2026/27 rates. Income Tax is an estimate to within pence. To compare with employing staff in a business, see the employer cost calculator.
Frequently asked questions
Can I claim Employment Allowance for my nanny?
No. The £10,500 Employment Allowance cannot be set against employer NI for someone employed for personal, household or domestic work, such as a nanny or gardener. The exception is a care or support worker whose household duties are all for someone who needs them because of old age, disability, illness, a mental disorder or past or present dependence on alcohol or drugs. Looking after healthy children is not within it.
Do I have to put my nanny in a workplace pension?
Yes, if they are aged 22 to State Pension age and you pay them more than £10,000 a year (£192 a week or £833 a month in 2026/27). You must pay at least 3% of their qualifying earnings, with 8% in total (on the qualifying-earnings basis). Younger or older nannies, and those paid less, can ask to join.
Does the minimum wage apply to a live-in nanny?
Yes, unless the nanny is a member of your own family who lives in your home and shares in the family's tasks and activities. The wider exemption for a live-in worker treated as one of the family was removed on 1 April 2024. Free accommodation counts towards minimum wage pay at £11.10 a day in 2026/27.
Should I agree a gross or a net salary with my nanny?
The payslip, and what you report to HMRC, always starts from gross pay. If you agree a net figure, any extra tax, NI or student loan deduction, for example after a tax code change, comes out of your pocket to keep the net the same. Agreeing gross puts the deductions on the nanny, as with any other job.
Do I need to register as an employer for a nanny?
You must register with HMRC if you pay the nanny £129 or more a week, if they have another job or a pension, or if you give them expenses or benefits. HMRC also says employers need to send payroll returns if any employee earns above the secondary threshold, £96 a week, where employer NI starts. You then run payroll, give payslips and deduct Income Tax and NI, even if you pay in cash. You can pay someone else to run the payroll for you.
Can I pay my nanny's tax with Tax-Free Childcare?
Yes, if you are eligible for Tax-Free Childcare and the nanny is approved childcare, which means registered (or with a registered agency). gov.uk says you can use your childcare account to pay the nanny's Income Tax and National Insurance contributions.