Frequently Asked Questions

If you employ a Nanny in the UK and you pay her more than £105 per week (tax year 2008/2009) you have the same responsibilities as a commercial employer and the law requires you to: 

  • Register as an employer with HMRC 
  • Keep a payroll record and provide payslips on her behalf 
  • Pay Employee’s income tax and National Insurance Contributions 
  • Pay Employer’s National Insurance Contributions 
  • Provide an annual summary of all these deductions and payments 

These obligations also apply: 

  • If your Nanny earns less than £90 per week in your employment but more than £105 in total (e.g. if she has two part-time jobs) 
  • To any employment taking place in the UK – irrespective of the country of origin of the Nanny or employer 

Remember that National Insurance Contributions go towards your employee’s entitlement to unemployment and state pension benefits. Nannies are increasingly aware of their rights as employees and this should not be overlooked. 

NET OR GROSS WAGE 

When Nannies and Nanny Agencies agree a salary with the parents they often refer to the net wage – the amount the Nanny takes home each week. In reality the Nanny is always paid a gross wage (net wage + tax + NIC), and on top of the gross wage the parents are obliged to pay employer’s NIC. Therefore it is important to be aware of the total cost of employing a Nanny.

SELF-EMPLOYMENT

With few exceptions (Maternity Nurses and Nannies in continuous temporary employment), Nannies simply do not meet HMRC criteria for self-employment. If liability to pay tax is not declared to HMRC and it comes to light, it is you, the employer who will be pursued for payment, not your Nanny.

PENALTIES

Failure to register as an employer if you are paying your Nanny above the weekly threshold is an offence, which can potentially lead to heavy penalties.‘Nanny Tax' offers a complete payroll service for employers of Nannies. For more information on Nanny Tax please look at the website: www.nannytax.co.uk - they charge circa. £260 annually for this service. 

Do Nanny’s get Sick Pay? 

Statutory sick pay is stipulated by Government Legislation. Any additional sickness payment is normally at the discretion of the employer and should be stipulated in the Nanny's contract of employment. As an employer you are also responsible for paying Statutory Sick Pay (SSP) and Statutory Maternity Pay (SMP) – but the latter may be reclaimed in full from the state. 

Whilst we attempt to summarise general information and the law as accurately as possible, this is not a complete statement of general information/the law. The Agency is not liable for any loss, damage, or negligence due to errors or omissions. It is the Client’s responsibility to validate all information herewith and seek professional advice where appropriate.