As an employer you will need to pay HMRC employee and employer Class 1 National Insurance based on nanny’s wage.
Employee national insurance is deducted from nanny’s gross salary, whereas employer’s National Insurance is an additional cost on top of nanny’s gross salary paid by the employer.
National Insurance is all based on the rates as below as per 6th April 2020:
| Weekly Gross Wage | Monthly Gross Wage | National Insurance Paid | |
| £120.00 | £520.00 | 0% | lower earnings limit and employee not entitled to state pension and as long as not working elsewhere does not need to be submitted to HMRC |
| £120-£183 | £520-£792 | 0% | lower earnings limit and NI threshold and needs to be submitted to HMRC as employee then qualifies for statutory payments |
| £169-£962.00 | £732-£4,167 | 12% employee pays 13.8% employer pays | |
| Above £962.00 | Above £4,1687 | 2% employee pays 13.8% employer pays |
You pay this quarterly to HMRC along with nanny’s tax and student loan if applicable. If your PAYE bill is over £1,500 a month, you will have to pay your PAYE monthly to HMRC.
If nanny has more than one job, it is cost efficient to register separately as employers as each family will then get the benefit of the above exemption of national insurance.
