How much does a nanny cost in 2022?
What you need to know before you negotiate a rate of pay with your nanny.
Calculating the basic rate of pay
The going rate for a nanny will depend on a range of factors: their level of experience, their qualifications and training, the number and ages of the children they'll be minding, the extent of their duties (expect to pay more if household chores are included).
Typically, you can expect to pay anywhere from €10.50 per hour (minimum wage as of January 2022) up to €20 per hour.
Gross vs Net
You’d be surprised how many clients don’t know this basic difference – and it can lead to some pretty awkward misunderstandings between families and nannies. Put simply, gross is salary before tax. Net is after tax (i.e. take home pay). So, gross pay - deductions = net pay. Bear in mind, nannies and minders often negotiate their salary in net terms, which is understandable as they are interested in how much they'll be taking home each week. However, at Nanny Payroll we recommend to our clients that they agree a gross rate with their nanny. This is because part of the equation is outside your control. You may agree a net wage with your nanny only to find that Revenue has adjusted their tax code to recoup previous taxes owed or they have split their tax credits across two jobs. The point is: the specifics of your nanny's tax code are variable and unknown to you, so don't commit yourself to an unknown cost.
Our tax calculator can help you work out gross and net equivalents (based on standard tax credits and cut off points). Or if you need any help or want to double check your sums, give us a call 087 389 9211.
What deductions are made from the gross wage?
Generally speaking, there are three deductions made from your nanny's pay: PAYE (income tax); Employee's PRSI and USC.
Income tax is exactly what it says on the tin. Income tax is charged at 20% up to the standard rate cut off point of €36,800 as of 2022. If your nanny earns more than that, they will pay 40% on the remainder.
Tax credits are then offset against the tax amount to calculate the final tax owed. Standard tax credits €3,400 as of 2022.
PRSI is Pay Related Social Insurance, referred to as your "stamps" in old money and USC is the Universal Social Charge.
What other costs are there?
Employers are liable to pay Employer's PRSI. This is calculated at 8.8% on weekly earnings up to €410 as of 2022 or 11.05% on weekly earnings over €410 as of 2022.
If your nanny or au pair is live-in, you can make deductions of €0.94 per hour for board and €24.81 per week, or €3.55 per day for lodgings (rates applicable from 1 January 2022).
Calculating net pay
You pay your nanny their net pay (gross pay less deductions). The total cost to you is gross pay plus employer's PRSI. You withhold the deductions (the difference between gross and net) from your nanny's pay and pay this, along with your Employer's PRSI contribution, over to Revenue every month.
Three top takeaways
- 1. Consider what rate you'll need to pay for the level of work entailed
- 2. Agree a gross salary, not net
- 3. Add 10% to the gross salary to approximate the total cost to you
For more help and advice on calculating how much to pay your nanny, contact our team today!