Live-In Nanny True Cost Calculator 2025/26
Calculate the total cost of a live-in nanny including accommodation value (which counts toward NMW compliance), gross pay, employer NI, holiday pay and any additional household costs. Live-in nannies are still employees and must be paid at least the National Living Wage on cash earnings.
Key Inputs
- Gross weekly or annual cash salary
- Accommodation provided: estimated rental value per week
- Meals provided: estimated value per week
- Holiday entitlement: statutory minimum 5.6 weeks
What You'll Get
- Total annual employer cost (cash salary + employer NI + pension + accommodation value)
- Effective hourly rate after deducting accommodation offset (maximum £9.99/week offset for NMW purposes in 2025/26)
- NMW compliance check on cash earnings
- Holiday pay accrual at 12.07% of earnings for irregular hours (if applicable)
Important Notes — 2025/26 Rates & Caveats
Live-in nannies are employees and must be paid at least the National Living Wage (£12.21/hour for those aged 21+ from April 2025) on their cash earnings. Accommodation can be offset against the NMW — the maximum accommodation offset rate is £9.99 per day in 2025/26. Meals have no formal offset rate but their value may count toward NMW compliance if contractually agreed. Holiday entitlement is the same as any other employee: 5.6 weeks (28 days for a full 5-day week). The accommodation value also counts as a benefit in kind for P11D purposes if provided free of charge.
Frequently Asked Questions
Does providing accommodation reduce the National Living Wage I must pay a live-in nanny?
Yes, but only up to the accommodation offset rate. In 2025/26 the HMRC accommodation offset is £9.99 per day (£69.93 per week). This means you can reduce the cash wages by up to £9.99/day against NMW calculations, but the nanny's remaining cash pay must still meet or exceed the NLW on hours worked. You cannot use accommodation to pay below the NLW in cash terms beyond the offset limit.
Is a live-in nanny's accommodation a P11D benefit?
Generally yes — where an employer provides accommodation to an employee and it is not necessary for the proper performance of their duties (as would be the case for a live-in nanny who could equally live out), the accommodation is a benefit in kind. The taxable value is the annual value (broadly the market rental value) less any rent paid by the nanny. The employer pays Class 1A NI at 13.8% on the benefit value and must report it on a P11D by 6 July.
How much holiday pay does a live-in nanny get?
Live-in nannies are entitled to the statutory minimum of 5.6 weeks paid holiday per year (28 days for a 5-day week). Holiday pay must be calculated based on average earnings over the previous 52 weeks. If the nanny works irregular hours, holiday accrues at 12.07% of hours worked. If the nanny includes additional payments such as overtime in their regular earnings, those must be included in holiday pay calculations following the Supreme Court's Bear Scotland ruling.
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