Nanny Share Payroll: Who Pays What and How It Works

A nanny share is a brilliant arrangement. Two families share one nanny, the nanny earns more, and both sets of parents pay less than they would for sole care. But the moment you start talking about nanny share payroll, things can get confusing fast.

Should you set up as one employer or two? How does pay get split? What about tax and National Insurance? These are questions we get asked all the time, and they’re worth getting right before your nanny starts. Here’s a clear breakdown of how it all works.

What actually counts as a nanny share?

A nanny share is when one nanny looks after children from two different families, either at the same time or on separate days. The arrangement comes in a few different forms, and which type you have affects how the payroll is set up.

A joint share is where the nanny looks after both families’ children together, usually at one family’s home. This is the most common type. A split share is where the nanny works for Family A on some days and Family B on others, but never has both sets of children at the same time.

The distinction matters because it affects whether you’re looking at one payroll or two.

One employer or two? This is the big question

This is the part that trips most families up, and it’s where nanny share payroll gets genuinely complicated. The short answer is: it depends on the type of share you have.

Joint share (both families together): In most cases this is treated as a one-employer situation. One family acts as the lead employer and runs the payroll, with the nanny’s full wage going through one PAYE scheme. The other family then reimburses their share privately. This is the simpler option and the one we’d usually recommend.

Split share (separate days): This is typically a two-employer situation. Each family has its own employment contract with the nanny and runs its own payroll. The nanny has two jobs, which means two separate PAYE schemes and two sets of employer obligations.

Some arrangements fall somewhere in between, and those need to be looked at case by case. If you’re not sure which category yours falls into, it’s worth getting advice before you set anything up, because unpicking a payroll that’s been structured incorrectly is a headache neither family wants.

How does the nanny’s pay get split between families?

There’s no fixed rule on how families divide the cost, and it often comes down to negotiation. Some families split it 50/50. Others split it based on hours, number of children, or which family’s home the nanny works from most often.

What is consistent is that a nanny in a share arrangement will generally expect a higher hourly rate than they’d charge for sole care. This is standard, and fair. Managing the needs of two families, even if the children get along perfectly, is more demanding than looking after one.

As a rough guide, a shared nanny might expect their rate to be around 20% higher than for sole care, though this varies quite a bit depending on location and experience.

Why you should never agree a net pay rate in a share

This is important, so it’s worth saying clearly: always agree a gross pay rate with your nanny, not a net one. This applies to all nanny employment, but it matters even more in a share.

Here’s why. A nanny’s tax code affects how much income tax comes out of their pay. If the nanny has two employers, the tax calculation becomes more complex, and what looks like a straightforward net figure can end up costing one family significantly more than they budgeted for.

Agreeing a gross rate removes that uncertainty. Everyone knows what they’re committing to, and there are no surprises when the tax codes shift. If you find yourself negotiating a net figure, we can translate it into gross for you so you can make a fair comparison.

Tax, National Insurance, and who’s responsible for what

Each employer is responsible for their own PAYE obligations. That means deducting income tax and employee National Insurance from the wages they pay, and paying employer’s National Insurance on top.

In a two-employer setup, the nanny’s personal tax allowance needs to be allocated carefully. By default, HMRC will assign the full personal allowance to one job and tax the second job at basic rate. This is fine if you’re aware of it and factor it into the gross pay agreement, but it’s something both families need to understand upfront.

In a one-employer setup, it’s simpler. The lead employer handles all of it, and the second family’s contribution is a private arrangement between the two households.

Don’t forget the pension

Pension auto-enrolment applies in a nanny share just as it does in any other employment arrangement. If you’re the employer (or one of the employers), and your nanny meets the eligibility criteria based on what you’re paying them, you have a legal duty to enrol them into a workplace pension and make contributions.

In a two-employer setup, each family’s eligibility is assessed separately based on what that family is paying. It’s possible that one family triggers auto-enrolment and the other doesn’t, depending on the split. Learn more about pensions for nannies.

Getting your nanny share payroll right from the start

A nanny share can work brilliantly and save both families a significant amount of money. But the payroll side needs to be set up correctly from day one. The common mistakes, agreeing net pay, not knowing whether you’re one employer or two, and misunderstanding how tax codes work across two jobs, are all avoidable with a bit of guidance upfront.

If you’re setting up a nanny share and want to make sure the payroll is handled correctly, get in touch. We’ve helped hundreds of families navigate exactly this, and we can make sure everything is structured properly so neither family ends up with an unexpected bill.

Get in touch with our friendly team if you need any help!