Should you give your nanny a holiday bonus?

Have you thought about giving your nanny a one-off bonus to say thank you for all their hard work this year as we approach the summer holidays, or help with the increased cost of living?  A bonus can also be given instead of a pay increase which allows you to better control of how much extra you give each year.  Your nanny plays such an important role in supporting your family and allows you to maintain a stable and happy unit so let them know they are appreciated, however you choose to show it.  Remember that any bonus must be included in their payslip as it will be subject to tax and national insurance so let your payroll agency know.  It is also worth checking what your contract states in terms of an annual review or bonus, especially if you used a template from an agency and didn’t note what that paragraph stated at the time. 



Firstly and most importantly, an employee will always appreciate their hard work being acknowledged.  The sector has seen a huge upturn in salaries as the effects of post-Brexit and the Pandemic have created the perfect storm in demand versus nannies available to work, so a bonus could make a real difference if they were considering looking elsewhere as they see their costs of living rise exponentially.  Don’t forget, an annual bonus is also standard practice in most employment sectors and this one shouldn’t be any different. 



Many employers will choose the end of the school year, Christmas or the anniversary of the nanny’s start date to give a bonus and you could even spread it across those periods as it may reduce the amount tax or national insurance incurred (depending on how much your nanny earns) and you can check this with your payroll agency. 


How much? 

This can vary depending on where you live and how much you can afford but you could approach a local nanny agency like who can give you an average figure for your area.  A common amount would be to match the increase in living costs, a percentage of your nanny’s salary, or the equivalent of a week’s salary.  


If you can’t afford to provide a financial gift at this time, you could also consider increasing their holiday allowance as a thank you.   



The NannyMatters team are always on hand for clients to provide advice and guidance and if you have a particular query on how much a bonus would incur in tax and national insurance they can give you an estimate so do get in touch.