By Filipino Nanny | Updated 22 August 2026
Gross nanny pay is the employee’s pay before Income Tax, employee National Insurance and other payroll deductions; net pay is what the nanny receives after those deductions. For a permanent nanny job, agreeing a gross salary usually makes the employment cost clearer because tax codes and individual deductions can change while the contractual gross salary remains the starting point for payroll.
This guide explains the terminology for UK household employers and candidates. It does not set a current London nanny salary benchmark; that requires verified placement-market data and is kept separate from this page.
What is gross nanny pay?
Gross pay is the salary or wage before employee deductions. It is the figure the employer normally puts into payroll and the figure from which PAYE tax, employee National Insurance and relevant pension deductions are calculated.
For example, if an employment contract states an annual gross salary, that is not the same as the amount that will arrive in the nanny’s bank account each month. The payslip shows how the gross figure is converted into take-home pay for that individual pay period.
What is net nanny pay?
Net pay is the amount left after payroll deductions. It can be affected by the employee’s tax code, National Insurance category, workplace-pension deductions, student-loan deductions where relevant and other lawful payroll adjustments.
That means two people with the same gross salary can have different net pay. It also means a household should not assume a quoted net amount can be converted into a permanent gross salary without considering the employee’s real payroll circumstances.
Why does Filipino Nanny use gross annual salary for the permanent agency fee?
Filipino Nanny’s current client Terms and Conditions calculate the permanent-placement fee as 15% of the agreed gross annual salary, subject to a £2,000 minimum. The wording matters because the agency fee needs a stable employment figure; an individual nanny’s take-home pay can vary with tax code and deductions.
This is also why we separate three different cost entities on the site:
- Gross salary: employee pay before deductions.
- Net pay: employee take-home pay after deductions.
- Employer cost: the household’s total cost, which can include employer NI, pension contributions, insurance, payroll administration and the agency fee in addition to gross salary.
See the agency fees page for the recruitment charge and the total cost of employing a nanny guide for employer-side costs.
What Income Tax affects nanny take-home pay in 2026–27?
For the 2026–27 tax year, the standard Personal Allowance is £12,570, although an individual’s actual allowance and tax code can differ. GOV.UK states that the allowance reduces for adjusted net income above £100,000 and that tax rates depend on the employee’s taxable income and residence rules.
See GOV.UK: current Income Tax rates and allowances. The employer should use payroll software or a payroll provider rather than manually assuming a tax code from an annual salary.
How does employee National Insurance affect net pay?
For most category A employees in 2026–27, employee Class 1 National Insurance is 8% on earnings between the Primary Threshold and Upper Earnings Limit and 2% above the Upper Earnings Limit. HMRC lists the 2026–27 Primary Threshold as £242 a week and the Upper Earnings Limit as £967 a week.
Other National Insurance category letters can produce different rates, so those figures should not be applied blindly to every nanny. See HMRC: employer rates and thresholds 2026–27 and GOV.UK: National Insurance contribution rates.
What about workplace pension deductions?
Where workplace-pension duties apply, both employer and employee pension contributions can affect payroll. GOV.UK states that employers must pay at least 3% of qualifying earnings into qualifying schemes, while the employee contribution depends on the scheme and the total minimum contribution rules.
The qualifying-earnings basis is not necessarily the whole gross salary. For most schemes, GOV.UK currently describes qualifying earnings between £6,240 and £50,270 a year. Check the actual scheme before estimating take-home pay. See GOV.UK: workplace pension enrolment and contributions.
Why can agreeing a net salary create confusion?
A net-pay promise effectively asks the employer to deliver a particular take-home amount even when the employee’s tax code or deductions change. That can make budgeting less predictable and may shift the effect of personal tax circumstances onto the household employer.
A gross salary is clearer because it states the employer’s contractual pay obligation before deductions. Payroll then calculates the individual net result using the current HMRC information.
This does not mean every historic or existing nanny contract that mentions net pay is automatically invalid. It means families should understand exactly what they are agreeing and use appropriate payroll advice when converting or renegotiating pay terms.
Is gross salary the same as total employer cost?
No. Gross salary is employee pay. Employer National Insurance is an additional employer liability where it applies, and the employer may also have pension, insurance, payroll and other costs.
For 2026–27, the standard employer Class 1 National Insurance rate is 15% above the relevant Secondary Threshold for a standard category A-style case, subject to category rules and reliefs. Household employers should calculate the real liability using payroll, not simply deduct employer NI from the employee’s gross pay.
Our nanny payroll, PAYE and National Insurance guide explains the employer setup.
What should a nanny job offer state?
For clarity, the offer and written employment terms should state the pay basis and frequency in a way both sides understand. Families should also define normal working hours, overtime arrangements if any, holiday, duties, live-in accommodation where applicable and other core terms.
Use our nanny employment contract guide and job-description template before making an offer.
What should candidates ask if a role is advertised as “net”?
- Ask what gross salary the payroll will use.
- Ask whether the quoted net amount assumes a particular tax code.
- Ask who will run PAYE and provide payslips.
- Ask how pension deductions are handled if you are eligible or enrolled.
- Ask whether the agency fee is being confused with the salary; it should be a separate client charge.
- Do not provide false tax or immigration information to make a take-home figure work.
If you are applying for work, our candidate guide to nanny jobs in London covers role checks and employment red flags.
Does this page tell me what a nanny should earn in London?
No. This page owns the gross-vs-net distinction, not market salary ranges. Publishing a 2026 London nanny salary range without verified current placement evidence would mix two different questions and create a second, potentially conflicting salary answer on the site.
Until Filipino Nanny’s current placement salary data is verified for publication, ask the agency for role-specific guidance when you submit the brief. The site will keep any future market salary ranges in one dedicated canonical salary guide.
Key takeaway
Use gross pay to understand the contractual salary, net pay to understand the employee’s take-home amount, and total employer cost to budget the household’s full financial commitment. Keeping those three figures separate prevents the most common salary confusion.