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As a cost starting point:

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First, to save everyone time it is essential a Parent works out the maximum Gross per hour salary rate they can budget to pay a Nanny up to as that determines who we can introduce.  

 

  1. Add up the weekly essential required number of hours.

  2. Then multiply by £14 per hour Gross which is the lowest rate for a minimum 1 year Experienced Nanny. At this point, you will know if you have to consider employing a lower cost Non-Experienced Nanny or can add on £1 per hour Gross until reach the highest rate can pay up to £18 per hour Gross.

  3. Then contact either HMRC or one of the below Tax Specialist Nanny PAYE Payroll Companies to ask what the Gross per hour rate you think you can budget up to Net (take home - after tax taken off) converts to on a standard/ basic HMRC PAYE tax code 1257L which is what most Nannies are on. At this point, you will know if you have to reduce that Gross per-hour rate down again.

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Unfortunately, incorrectly most Childcarers in interviews talk just of the take-home (Net) rate they seek which easily causes misunderstandings as the Gross per hour salary rate is the only figure relevant to the Employer.

 

HM Revenue & Customs (HMRC) deems a Parent the Employer and the chosen Nanny as their Employee:

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This means by UK Law the Employer (not the Nanny but they must insist do and must give the Employer their P45 and Personal Tax allowance code) is responsible for:

 

  1. Registering their Employee (Nanny) with HMRC.

  2. Calculating their Employee PAYE (Pay As You Earn) Gross Deductions (to Net) and National Insurance (NI) Tax and pay to HMRC.

  3. Paying an extra Employer National Insurance (ENI) contribution.

  4. As in any other career, Nannies are entitled to varied Government Statutory legal rights such as:

 

  • Minimum wage relevant to their age.

  • Discussion about enrolment into a Government Work Pension.

  • Annual Holiday leave - on days an Employer does not need a Nanny they are to be paid as usual and not expected to transfer the hours.

  • Sick Pay (SSP) - first, 3 days in a row sick are 100% unpaid (self - certification). The Employer is under no legal obligation to pay but Nanny can ask to be paid if they use available annual leave. After the 4th day of sickness if with a doctor's certificate SSP is payable at approx. £100 week and refunded by HMRC.

  • Maternity Leave (SMP) - for up to 52 weeks and Employer claims back from HMRC. The Nanny by Law has the right to return to work but only on the previously signed contract terms. Most Nannies will ask if they can uniquely return to work bringing their own Child which an Employer is under no legal obligation to agree to or answer in that conversation. If agreed a new contract has to be created and a lower gross per hour rate discussed as they are not paying out for Childcare to work as such an arrangement must benefit the Employer to.

 

Other additional Employer costs:

 

  • Fuel/petrol and car wear allowance is paid if the Nanny is asked to use their own car for work.

  • Employer Liability Insurance.

  • Cash kitty allowance for Nanny to buy craft activity items, occasional outing treats, etc.

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Understandably most Parents (Employers) find this a daunting and complex task:

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Debbie Top Tip:

 

Most Parents which also gives much-needed reassurance to the Nanny that the Employer is also looking out for their interest which creates loyalty find the easiest solution is to delegate this task for a monthly fee to a PAYE Tax company that offer varied other services such as below:

 

 

  1. Above Help the Employer HMRC form register on a PAYE Tax deduction Scheme.

  2. Check (Employer responsibility) documents /visas related to eligibility to work in the UK.

  3. Calculate all year the Employee figures based on individual personal circumstances with correct and up-to-date government advice.

  4. Provide a Contract of Employment that is signed by both before and within 2 months of starting.

  5. Provide a monthly payslip of the amount, date, and when a Parent has paid to HMRC their PAYE Tax.

  6. Will confirm as HMRC that under UK Law the Nanny cannot be self-employed because a Nanny does not all year have hundreds of ad hoc customers or have only part of their total agreed Gross per hour rate is PAYE declared.

  7. Advise on varied Employment scenarios including splitting the Tax Allowance such as:

 

  • Nannies with a 2nd job (Employer).

  • Nanny Share -  two families team up that ideally know each other on the same day (s) each paying £10 hour gross so Nanny earns £20 hour Gross.

  • Temporary Nanny.

  • Some Nannies do so few weekly hours the Employer may not need to HMRC register.

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Little Masters and Misses are:

 

  • Not qualified accountants to give Childcarers or Parents accurate or in-depth Gross-to-Net salary or final cost advice.

  • Not qualified solicitors to give Childcarers or Parents accurate or in-depth contract advice.

  • Not liable or responsible for any discussion, contract, or gross salary misunderstanding or agreement between an Employee (Nanny) or Employer (Parent).

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It is an LMM registration condition that it is deemed that:

 

  1. When a Parent (Employer) completes and submits our form they are accepting to follow the above UK Employment Laws.

  2. When a Childcarers (Employee) completes and submits our form they are accepting to follow the above UK Employment Laws and agreeing if a Parent in 1st interview does not bring up to ask in a polite, calm, and matter-of-fact way how the Employer will deduct their PAYE Tax and NI. 

  3. By doing so both are protecting themselves from a stressful HMRC inquiry and fines.

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