If you’re asking yourself, “How much should I pay my nanny,” read on as we crunch the numbers and discover some interesting insights.

An Increase in New Zealand’s Minimum Wage and Nanny Pay

In April, the minimum wage is to increase from $22.70 to $23.15. That’s a rise of around 1.9%. It’s not the best news for those on low wages, given than the annual rate of inflation in New Zealand for 2023 was 4.7%.

However, the situation was a bit better for nannies, whose hourly rates increased by 2.74% in 2023. There are also some indications that overall inflation and pressures on wages may be slowing down.

What Should I Pay My Nanny in 2024?

Lots of families have become stuck between a rock and a hard place when it comes to what to pay their nanny. On the one hand, their own budgets have been facing a tight squeeze. On the other, nannies are in demand and also want to see their wages rise in line with inflation.

There is no time like the present to consider reviewing your nanny’s pay rate. A rise will boost their sense of value and act as an incentive for them to stay working for you. If you’re trying to find a nanny, you’re also more likely to get a more experienced and better qualified nanny.

We’ve done some research to help you budget for your nanny. Here are the critical nanny pay rates in New Zealand for 2024 that you need to know about:

• Average: $29.40
• Minimum: $22.70
• Maximum: $50

It’s useful to get the bigger picture and see what percentage of nannies get paid over the $22.7 to $50 scale. You can then see how the wages you’re paying your nanny fare in comparison to other families in New Zealand. Here’s the lowdown on rates and the percentage of nannies who get paid them:

• $22.7- $24: 10%
• $24- $26: 16%
• $26- $28: 17%
• $28- $30: 25%
• $30- $32: 13%
• $32 and above: 19%

The biggest category for nanny pay rates in New Zealand lies between the $28 to $30 mark.

The main headline, however, is that more nannies are now earning above $30 per hour.  The latest figures put the number at 32%, compared with 21% a year ago.

How Much Should I Pay My Nanny in the City?

There are many factors that will play into pay fluctuations between different nannies. Experience and qualifications are two, but where you live will be a crucial driver. Cities command higher-than-average salaries across the board.

An increased demand for nannies in places where there are lots of families and a higher cost of living may also be critical factors that add fuel to the fire. Here are the average hourly rates for nannies in three of New Zealand’s major cities:

• Auckland: $30.44
• Canterbury $26.89
• Wellington $28.31

There’s been an increase in the hourly wage in each major region. The main urban centres have been out-pacing the national average. It’s worth noting that Canterbury has seen a 7% increase in wages.

What to Consider When Deciding Hourly Rates? 

We’ve already touched on experience and qualifications. There are other factors to weigh up when paying your nanny. Entrusting the care of your children to the hands of another human being is a big ask. It’s only right that you should pay a nanny fairly for the critical work they do.

On top of all this, other considerations may have an impact on the hourly rate you pay your nanny. These include:

• The age of the child or children
• What you can realistically afford
• The types of duties you expect of your nanny, including driving your car

There are no specific official requirements to be a nanny in New Zealand. It’s a good idea, however, to go for a candidate who at least has a qualification like:

• A New Zealand Certificate in Early Childhood Education and Care (Level 3 or 4)
• A New Zealand Diploma in Early Childhood Education and Care (Level 5)

The Full Cost of Hiring a Nanny in New Zealand

It's worth remembering that multiplying a nanny’s hourly rate by the number of hours you need will not give you the whole picture. There are specific costs to consider along with other dependencies at play. These include:

• Paid leave and sick pay
• KiwiSaver contributions
• ACC Employment levies
• Car insurance for your nanny if you want them to drive your vehicle

These extras come as part of the territory when you’re an employer. And, an employer is exactly what you will become when you hire a nanny. The business relationship you will have with your nanny will be a formal one. With that comes legal obligations.

A lot of the admin related to hiring a nanny can be time-consuming. This is particularly true if it’s your first time hiring someone. A cost-effective way to deal with this is to outsource the payroll to a third party.

Associated Costs That Come With Employing a Nanny

Employees have every right to expect that their employers are going to pay them on time, give them a payslip and take care of their taxes. Nannies will therefore hold you to the same standards that would apply to any business that employs a worker.

Understanding the Minimum Wage

There are two great big “Nos” when employing a nanny. The first is to think you can pay your nanny cash under the table. The second is to pay your nanny less than the minimum wage.

The minimum wage for all adults is $23.15 per hour. The significant word here is “minimum.” Just because it’s possible to pay someone a minimum of $23.15 an hour doesn’t necessarily mean you shouldn’t pay them more.

Leave, Sick Leave and Public Holidays

Workers in New Zealand have an entitlement to at least 4 weeks of paid annual leave a year if they work regular hours in a full-time or part-time job. This does not include public holidays or sick leave.

Employees can claim up to 10 days of sick leave each year too. This applies if:

• They have 6 months’ current continuous employment with you
• They have worked an average of 10 hours per week
• They have worked at least 1 hour each week or 40 hours each month

And, if your nanny has to work on a public holiday, you may either have to pay them a higher rate or give them a day off in lieu.

KiwiSaver

This is a voluntary savings scheme. It’s there to help set employees up for retirement. They can make regular contributions from their pay or directly to their scheme provider.

As an employer, you will need to check if your new nanny is eligible for automatic enrolment in the scheme. If they are, you’ll need to set them up and make the relevant KiwiSaver deductions and contributions on their behalf.

ACC Employment Levy

You must ensure that your home is a safe environment for your nanny to work in. The Accident Compensation Corporation (ACC) is a government organisation. It manages New Zealand’s accident compensation scheme. It also decides on claims.

We often now use ACC in a general way to refer to the entire scheme and the compensation a person might get under it. Costs covered under the scheme include:

Medical and other treatment

• Loss of income
• Social rehabilitation aimed at restoring independence
• Vocational rehabilitation to get people back to work
• Lump sums for permanent disabilities

Employers shoulder part of the burden of paying for ACC. If they do not pay ACC they can be liable for significant penalties. All New Zealanders also pay an ACC levy. As an employer, you’ll deduct ACC Earners’ levy from your nanny’s wages. 

ACC gives different industries a classification code. The subsequent ACC contributions then vary. They depend on a particular employment sector’s perceived risk among other things. As someone who employs a nanny, the code you’ll need is Q871010.

There are so many dependencies at play here that make it impossible to give a one-size-fits-all figure for ACC costs. A maximum of a few hundred dollars each year rather than several thousand will likely cover your ACC commitments.

Why You Need Nanny Payroll Services

Making sure everything’s above board when employing a nanny takes a lot of time and effort.

This can be hard on parents who are already trying to juggle a career, budgetary pressures and a long list of other commitments. It also requires keeping your eye on the ball. Rules change from time to time. That includes nanny pay rates in New Zealand.

These are some of the reasons why we recommend nanny payroll services to take care of your admin. Pay the Nanny has a team of qualified accountants and financial and taxation specialists. We can advise you on everything from the average hourly rate for a nanny where you live to the contracts you’ll need and everything in between.

Getting Nanny Pay Rates in New Zealand Right

To us, paying the nanny is second nature. For one low and affordable monthly fee, let Pay the Nanny sort out all the admin connected to paying your nanny, from taxes to KiwiSaver. For the time and stress that you’ll save, it’s a small price to pay.