Being a nanny is one of the most rewarding careers you can have. You get to form close-knit bonds with families and their little ones while having a substantial impact on their lives. That said, this career choice also comes with contracts and talks of salaries, pensions, and payslips! While we provide ongoing, long-term support, it’s very important to understand the difference between things like gross and net pay. This way you can figure out what you will earn in a role. This can often feel overwhelming, so it’s essential you have the tools and the knowledge to go into the workforce with confidence!

When it comes to most jobs, salaries will largely be advertised in “gross” terms. This isn’t always the case for nanny roles, which have historically been discussed in “net” terms. Recently, there has been a shift away from talking about net income when it comes to nanny positions. Agencies, parents, and nannies are beginning to talk about salaries in gross terms. This is partly to respect nannies as professionals and to discourage tax evasion on the part of employers.

But what is the difference between gross and net pay? Is discussing and agreeing to gross pay more beneficial to you as a nanny? We’re going to tackle these questions now so you can go into the nanny job market with more conviction.

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Gross pay vs. Net pay: What’s the actual difference?

  • Gross pay is the total amount you earn before any taxes
    • It’s the bigger number on your payslip.
    • It reflects the salary you agree to when you are hired. 
    • Calculate your net to gross pay using this income calculator.
  • Net pay is the amount of money you actually pocket. 
    • It’s your gross pay minus any mandatory and voluntary deductions and taxes. 
    • Common deductions you might see on your payslip are: income tax, national insurance and your pension. 
    • This will look different for each person depending on their circumstances.
    • Calculate your gross to net pay using this income calculator.

It is worth being aware that your employer’s total cost is even higher than your gross pay. They will need to pay National Insurance contributions and perhaps also a pension on top of your gross salary. However, it’s important to keep in mind the impact gross pay and net pay has on you and your livelihood.

How does gross pay and net pay impact what I earn?

Net pay and gross pay will impact how much money you actually take home as a nanny. 

Let’s go through an example. If your gross hourly rate is £15 per hour, your net pay will likely be £13-14 per hour. Your employer’s total cost will be around £16-18 per hour. The exact amounts depend on your hours of work and other income. See the graph below:

This image is an example comparing the hourly gross and net pay for a nanny, as well as the cost for the employer.

You can try your hand at calculating your net pay and your gross pay using income calculators. These will help you understand the difference between the two and allow you to make more informed decisions when it comes to your pay as a nanny. 

Why does it matter?

Now that we understand what the difference is, and how it will impact our earnings, so what? Why does it matter? And does it benefit you? Discussing your contract in gross terms is beneficial for multiple reasons. That said, it doesn’t take away from the importance of understanding your net pay.

Net pay can cause confusion…but don’t ignore it completely!

Net pay can be confusing for your potential employers and can be off-putting. People have different tax circumstances which affect what their net pay will be. This makes it difficult for families to figure out their total cost if you are asking for a net salary. With this in mind, it’s helpful to stick to gross pay when discussing your earnings with families – you can figure out your net pay (using this calculator) and your employer can figure out their total costs.

Even though net pay can cause confusion, it’s still important for you as a nanny to have a full understanding of what your net pay is when discussing your earnings with a family. 

Gross salaries include additional costs and deductions so it can be difficult to understand what your take-home salary really is. When discussing an initial salary or a pay increase, make sure you know how it will impact your net pay. A gross pay increase doesn’t always translate to a net pay increase! Using the gross to net (calculator here) and net to gross (calculator here) income calculators gives you a mechanism to gain an understanding of how a raise will really impact you. 

Confusion around your net and gross pay can cause job offers to fall apart. This could also damage relationships further down the line if you and your employer aren’t on the same page about your salary.

Gross pay can make roles more comparable

The majority of other jobs in the UK are discussed in gross terms. This creates a benchmark standard across different jobs and allows you to compare your potential income more accurately.

For instance, if you’re browsing different roles in the childcare industry, you might need to look at what you could make as a private nanny and compare this figure to what you could make as a nursery worker or childminder. This will allow you to get a better idea of the different opportunities jobs can provide.

Having the numbers in gross terms allows you to compare and makes the differences more clear-cut.

Easier to rent or take out a loan

Discussing your salary in gross terms also makes it simpler to rent a property or take out a loan. Landlords/landladies or leaseholders will want to see proof of your income in gross terms. The same goes for lenders.

If you were to take a nanny job and only agree in net terms, you could find yourself at a disadvantage if you want to rent. They may reject your application as your net pay is often a lower number than your gross pay.

Want early access to new roles before they’re posted anywhere else?

In short, discussing your salary in gross terms not only makes it easier to secure a nanny role, but it will allow you to accurately compare incomes and make it much easier to take out a loan or rent a property.

However, don’t forget about your net pay! Make sure you are clear on your gross pay and your net pay, so that you and your employer start off on the right foot and continue to have a positive working relationship.

Hopefully, with this information, you can confidently begin or continue your journey as a nanny and find a family that’s right for you. If you ever have any questions, we’re more than happy to help. We’re here to support our nannies throughout their job search.

Keen to get started? Joining our nanny job WhatsApp group will give you early access to new nanny jobs available at Koru Kids most mornings, before they are posted anywhere else!

If you want to browse nanny roles currently available, please have a look at our long list of families looking for someone just like you. All you need to do is apply – your perfect family might be a few clicks away!