Category: payroll

What’s the difference between ‘gross pay’ and ‘net pay’?

Almost all employment industries in the UK discuss salaries in Gross terms; in the nanny industry, however, this hasn’t always been the case. Some nannies are still paid net salaries, but as an employer, if you agree to a Net salary with your nanny you may be in for a shock when faced with how much employing your nanny is really going to cost…  

Almost all employment industries in the UK discuss salaries in Gross terms; in the nanny industry, however, this hasn’t always been the case. Some nannies are still paid net salaries, but as an employer, if you agree to a Net salary with your nanny you may be in for a shock when faced with how much employing your nanny is really going to cost…  

What is Net Pay?

Net Pay is the ‘Take Home Pay’ that your nanny receives after Tax, National Insurance, and Pension deductions (if applicable). This means you will be liable for paying your nanny’s tax, National Insurance, Pension contributions, as well as any student loans and/ or attachment of earnings order (such as previously unpaid council tax or child maintenance) against your employee on top of their salary. This is where many employers find themselves paying a lot more than they had anticipated. 

What is Gross Pay?

Gross Pay includes your nanny’s ‘Take Home Pay’ and your nanny’s tax, National Insurance, and Pension Contributions (if applicable). 

What are the benefits of a Gross salary? 

For Nanny Employers:

  • A Gross salary will help you budget better because it includes tax, National Insurance, and pension contributions right from the start.
  • You won’t be responsible for any unpaid taxes or deductions from the nanny’s previous jobs.
  • It makes things clearer when dealing with HMRC, who usually only talk in Gross terms.

For Nannies:

  • A Gross salary provides job stability, since employers know the full cost upfront.
  • You can take advantage of your tax-free allowance, which usually increases each April.
  • You can compare your salary with other childcare jobs, since most industries use Gross terms.
  • It’s easier to show proof of income for things like mortgages or loans because lenders usually want to see Gross income. 

So how much does employing a nanny really cost?

The Gross salary doesn’t cover all the costs of employing a nanny. What does cover everything is something called the ‘Total Cost of Employment’.

The Total Cost of Employment is the Gross Salary, plus the Employer’s National Insurance Contributions and the Employer’s Pension Contributions (if applicable).

In other words, a Gross salary accounts for your nanny’s tax, National Insurance, and Pension Contributions, but not your own employer contributions. 

How can I work out my Total Cost of Employment?

If you’d like to work out your Total Cost of Employment, you can use Nannytax’s Calculator. Simply enter the Gross or Net salary figure and it will calculate your Total Cost of Employment and some additional helpful breakdowns – easy peasy!

This blog was written by Nannytax, with over 30 years of experience, they are the UK market leader in nanny payroll and nanny employment.

Discover more about Nannytax here. 

Compliance

If you’re new to employing a nanny, you might not be aware of all the things you will be responsible for when you become a nanny employer. Let’s talk about them. 

My responsibilities as a Nanny Employer

If you’re new to employing a nanny, you might not be aware of all the things you will be responsible for when you become a nanny employer. Let’s talk about them. 

Setting up and running payroll 

When you become a nanny employer, you will need to register as an employer with HMRC, once you’ve done this you’ll need to set up and run payroll, providing your nanny with weekly or monthly payslips. 

If you choose to use a nanny payroll service to run payroll for you, such as Nannytax, you will need to verify all the legal documentation is in place so that they can liaise as your payroll agent with HMRC.

Providing a nanny contract

When you find your new nanny, you will need to provide him/her with an employment contract. This will ensure both you and your nanny have a clear understanding of what is expected during the term of employment. 

Reporting to HMRC

You will need to report all of your nanny’s earnings to HMRC if they are earning above the lower earnings limit, which is £120 a week. If your nanny is earning below the lower earnings limit but they have another job or other source of income, their earnings will still need to be reported to HMRC. 

Paying your nanny and Tax & National Insurance liabilities

You’ll need to pay your nanny the net amount stated on their payslip each week or month, this is your nanny’s ‘Take Home Pay’ after Tax and National Insurance deductions. You will be responsible for paying any Tax and National Insurance liabilities to HMRC, these are paid either monthly or quarterly depending on the amount. 

Pensions

If your nanny is eligible, you will need to enrol them into a workplace pension scheme. Once enrolled into the pension scheme, both you and your nanny will contribute to the pension. 

Even if your employee doesn’t want to join or remain in the pension scheme, it is a legal requirement for you to enrol them. Once your nanny is enrolled, he or she may choose to ‘opt out’ if that’s what they wish to do. 

Insurance

All UK employers must be insured. There are specialist nanny employer insurance options available to you, such as Enable Insurance. Holding an insurance policy will ensure you are protected if your nanny becomes injured or ill as a result of working for you.

How can Nannytax help?

This may all seem a bit daunting, but when you sign up to Nannytax, we’ll take care of all of this for you! From your initial Nanny PAYE Scheme set up to producing the final P45 when your nanny leaves, when you join Nannytax you can rest assured your nanny’s payroll is in safe hands.

This blog was written by Nannytax, the award-winning and UK leading nanny payroll experts with 30 years experience. Discover more about Nannytax here.

Winter Fun for Littles: 5 Indoor Activities to Beat the January Blues

January can be challenging with its short days and cold weather, especially after the festive season’s buzz has faded. But don’t fret! There’s plenty of fun to be had indoors that can make the most of this cosy time of year and keep those little ones engaged and cheerful. Here are five indoor activities designed to beat the January blues for the little ones in your care.

January can be challenging with its short days and cold weather, especially after the festive season’s buzz has faded. But don’t fret! There’s plenty of fun to be had indoors that can make the most of this cosy time of year and keep those little ones engaged and cheerful. Here are five indoor activities designed to beat the January blues for the little ones in your care.

1. Indoor Snowball Fight:

No snow? No problem! Create your own indoor snowballs with crumpled white paper or soft white pom-poms. Set up a small area with cushions and furniture for hiding, and let the snowball fight commence! It’s fun, active, and safe for indoor play.

2. DIY Winter Wonderland:

Transform a section of your living room into a winter wonderland using white sheets, cotton wool for snow, and paper snowflakes. Children can help decorate this area and then use it as a play zone for their winter-themed stories and games.

3. Hot Cocoa Bar:

Set up a little hot cocoa bar with various toppings like marshmallows, whipped cream, sprinkles, and chocolate chips. Let the kids customise their hot chocolate. Pair this activity with story time or a movie for a cozy afternoon.

4. Ice-Skating at Home:

If you have wooden or tiled floors, create a makeshift ice rink. Use wax paper as “skates” over socks, and watch your little ones slide and glide around. Ensure the area is safe, removing any sharp edges or hard furniture they might bump into.

5. Crafting Session: Winter Animals:

Focus on crafting winter animals like penguins, polar bears, and owls using paper plates, cotton balls, and other craft supplies. These crafts can then be used to decorate the home or their play area, adding a personal touch to their indoor environment.

January doesn’t have to be dull. With a little creativity, you can turn it into a month filled with indoor fun that keeps those young minds and bodies active and happy!

Navigating Pregnancy as a Nanny in the UK: A 2023 Guide

Pregnancy is an exciting time, but it also brings a host of questions, especially for nannies working in the UK. Understanding your rights and responsibilities is key to a smooth journey. Let’s explore what you need to know about pregnancy as a nanny in 2023.

When to Inform Your Employers?

Legally, you must notify your employers of your pregnancy by the 25th week. You’ll receive a MATB1 form from your midwife around 20 weeks for this purpose. However, many nannies choose to inform their employers earlier, often post the 12-week scan. Early disclosure can facilitate risk assessments for your role and ensure you receive paid time off for antenatal care.

What Does a Risk Assessment Entail?

Given the varied nature of a nanny’s job, risk assessments can differ. For pregnant nannies, considerations might include the physical strain of lifting children or exposure to infectious diseases.

Continuing Work During Pregnancy

Nannies can certainly continue working throughout their pregnancy. Your employer is required to make reasonable adjustments to your role to accommodate your pregnancy.

Maternity Leave Regulations

You can initiate your maternity leave any time post the 29th week of pregnancy. The commencement of maternity leave may also be triggered by the birth of your baby, a stillbirth post the 24th week, or pregnancy-related sickness after the 36th week.

Maternity Pay for Nannies

If you meet the criteria (having worked for the family for at least 26 weeks by the 25th week of your pregnancy), you are entitled to 6 weeks at 90% of full pay, followed by 33 weeks at the statutory rate or 90% of your average weekly earnings, whichever is lower. Employers can generally reclaim these costs due to their status as small employers.

If you don’t qualify for SMP, you can claim Maternity Allowance, and your employer should provide form SMP1. If you have multiple jobs, you may be eligible for SMP from each employer.

Duration of Maternity Leave

You are entitled to 52 weeks of maternity leave, split into 26 weeks of Ordinary Maternity Leave and 26 weeks of Additional Maternity Leave. While you can choose to take less, a minimum of 2 weeks post-birth is mandatory.

Holiday Accrual and KIT Days

Your holiday accrual continues during maternity leave. You may also participate in up to 10 Keeping In Touch (KIT) days without affecting your SMP.

Job Security Post-Maternity Leave

Post Ordinary Maternity Leave, you have the right to return to your job under the same conditions. If you take Additional Maternity Leave, your employer must offer a similar role if your original job is unavailable.

Redundancy and Bringing Your Child to Work

You cannot be made redundant for being pregnant; that would be discriminatory. However, redundancy may occur if there’s a significant change in childcare needs during your leave. Additionally, nannies don’t inherently have the right to bring their child to work, but this can be negotiated with your employer.

In a nanny share situation, bringing your child to work would require registering as a childminder under the Children’s Act 1989.

Does my nanny need a pension?

The government’s pensions initiative, known as Auto Enrolment, requires all UK employers to automatically enrol any qualifying employees into a workplace pension scheme and make contributions towards that pension. As a UK nanny employer, you will need to enrol your nanny into a pension scheme if he or she qualifies. 

The government’s pensions initiative, known as Auto Enrolment, requires all UK employers to automatically enrol any qualifying employees into a workplace pension scheme and make contributions towards that pension. As a UK nanny employer, you will need to enrol your nanny into a pension scheme if he or she qualifies. 

Does my nanny qualify for a workplace pension?

If your nanny is aged between 22 years old and the State Pension Age and they earn £10,000 or above per year, then they do qualify for a workplace pension. 

What will happen if I don’t offer my nanny a pension scheme?

If your nanny is eligible for a pension scheme and you fail to enrol them into one, or if you fail to pay pension contributions, you can be fined by The Pensions Regulator. 

My nanny doesn’t qualify but still wants a pension, what should I do?

Your nanny still has the right to ‘opt in’ and join a pension scheme even if they do not qualify for a workplace pension. It is your responsibility to enrol them into a suitable scheme. 

My nanny qualifies for a pension but doesn’t want one, what do I need to do?

It is a legal requirement for you to enrol your nanny into a pension scheme if they qualify for it, even if he or she doesn’t want one. Once your nanny is enrolled into a pension scheme, they can then choose to ‘opt out’ or ‘cease membership’ of the scheme. 

If this is the first time you’ve heard about your Auto Enrolment and nanny employer pension duties, don’t worry! Nannytax provides a fully managed workplace pension service for their clients which means the Nannytax team of pension specialists can take this off your hands!

This blog was written by Nannytax, the award-winning and UK leading nanny payroll experts with 30 years experience. 

Discover more about Nannytax here. 

Statutory Rights

As a nanny employer, there will be a number of Statutory Payments you may need to pay your nanny over the course of their employment. It’s important that you familiarise yourself with each payment and it’s helpful to be aware of the terminology when employing a nanny! 

What is Statutory Pay?

As a nanny employer, there will be a number of Statutory Payments you may need to pay your nanny over the course of their employment. It’s important that you familiarise yourself with each payment and it’s helpful to be aware of the terminology when employing a nanny! 

Statutory Sick pay (SSP) 

As a nanny employer, if your nanny is absent from work due to ill health, you are responsible for administering Statutory Sick Pay. As of 2015 employers are no longer able to reclaim SSP from the government, so you will need to cover your nanny’s sick pay yourself (the 2023-2024 rate for SSP is £109.40). 

Maternity pay 

If your nanny becomes pregnant and goes on maternity leave, as her employer you will be responsible for her Statutory Maternity Pay. The pay rate for the first six weeks of maternity leave is 90% of your nanny’s average weekly earnings, the weekly rate for the following 33 weeks is £172.48 or 90% of your nanny’s average weekly earnings – whichever is lower. Statutory Maternity Pay is funded by the Government but you will need to and are responsible for submitting the maternity pay claim, find out more. 

Holiday pay

Your nanny is entitled to a legal minimum holiday allowance and to holiday pay, which you are responsible for paying. A full-time employee is entitled to a minimum of 28 days of paid annual leave – this includes the 8 UK bank holidays. You can use the Nannytax holiday entitlement calculator to work out how many days or hours of paid holiday your nanny is entitled to: www.nannytax.co.uk/holiday-calculator 

This blog was written by Nannytax, the award-winning and UK leading nanny payroll experts with over 25 years experience. 

Discover more about Nannytax here. 

Statutory Rights

As a nanny employer, there will be a number of Statutory Payments you may need to pay your nanny over the course of their employment. It’s important that you familiarise yourself with each payment and it’s helpful to be aware of the terminology when employing a nanny! 

What is Statutory Pay?

As a nanny employer, there will be a number of Statutory Payments you may need to pay your nanny over the course of their employment. It’s important that you familiarise yourself with each payment and it’s helpful to be aware of the terminology when employing a nanny! 

Statutory Sick pay (SSP) 

As a nanny employer, if your nanny is absent from work due to ill health, you are responsible for administering Statutory Sick Pay. As of 2015 employers are no longer able to reclaim SSP from the government, so you will need to cover your nanny’s sick pay yourself (the 2023-2024 rate for SSP is £109.40). 

Maternity pay 

If your nanny becomes pregnant and goes on maternity leave, as her employer you will be responsible for her Statutory Maternity Pay. The pay rate for the first six weeks of maternity leave is 90% of your nanny’s average weekly earnings, the weekly rate for the following 33 weeks is £172.48 or 90% of your nanny’s average weekly earnings – whichever is lower. Statutory Maternity Pay is funded by the Government but you will need to and are responsible for submitting the maternity pay claim, find out more. 

Holiday pay

Your nanny is entitled to a legal minimum holiday allowance and to holiday pay, which you are responsible for paying. A full-time employee is entitled to a minimum of 28 days of paid annual leave – this includes the 8 UK bank holidays. You can use the Nannytax holiday entitlement calculator to work out how many days or hours of paid holiday your nanny is entitled to: www.nannytax.co.uk/holiday-calculator 

This blog was written by Nannytax, the award-winning and UK leading nanny payroll experts with over 25 years experience. Discover more about Nannytax here. 

Nannytax Salary Index 22/23

How much should I pay my nanny?

Nannytax have recently launched their 22/23 Nanny Salary Index, showcasing the latest nanny salary data across the UK. These salaries are based on Nannytax’s database of nannies and can help you, as a nanny employer, understand roughly how much you should be paying your nanny!

How much should I pay my nanny?

Nannytax have recently launched their 22/23 Nanny Salary Index, showcasing the latest nanny salary data across the UK. These salaries are based on Nannytax’s database of nannies and can help you, as a nanny employer, understand roughly how much you should be paying your nanny!

London Nannies 

Salaries for nannies in London have increased by 8% compared to last year. On average, nannies in London are paid £16.48 per hour, and £42,859 annually. 

Home Counties & Greater London

In the Home Counties & Greater London, nanny salaries have seen a 14% increase to their salaries when compared to last year. The average annual salary for a nanny based in the Home Counties & Greater London is £40,304 and per hour these nannies are paid £15.50.

Rest of UK Nannies

Across the rest of the UK, nannies have seen an 11% increase to their salaries over the last year. These nannies are earning an average of £13.84 per hour, and £35,970 annually. 

Do you want to know the average nanny salary in your specific area? Download Nannytax’s Nanny 22/23 Salary Index.

Please keep in mind that these figures are intended for guidance purposes only. As with any other industry, a nanny’s salary can change depending on their qualifications, skills, and experience.

Nannytax are the UK leading nanny payroll experts with over 25 years experience. Discover more about Nannytax here. 

Travelling with nanny during summer holidays

School’s out! Summer is finally here and if you’re planning a trip abroad this year, whether you’re planning to take your nanny with you or not, you might be wondering where your nanny fits in… 

Holidays with your nanny

School’s out! Summer is finally here and if you’re planning a trip abroad this year, whether you’re planning to take your nanny with you or not, you might be wondering where your nanny fits in… 

I’m not planning to take my nanny on holiday with me, do I still need to pay them? 

You may have agreed in your contract to split holiday entitlement, for example 50/50. This would mean that 50% of your nanny’s holiday they can choose when to take it, and the other 50% is for you to decide. In this case, you may have agreed for your nanny to take their holiday whilst you’re away, but you will still need to administer holiday pay.

If you have not agreed to this, and your nanny is not due to take holiday while you are away, you will need to pay your nanny in full as they are available and willing to work.

I’m taking my nanny on holiday with me, will this holiday be deducted from their holiday allowance?

If your nanny is going on holiday with you to provide childcare, they are therefore working, and this won’t affect their holiday allowance. If your nanny ends up working longer hours while on holiday, you may need to compensate your nanny by providing overtime pay or giving them additional time off in lieu. 

What should I discuss with my nanny before we go on holiday?

There are a few things you should discuss before you go on holiday with your nanny, this may include… 

  • The rate of pay, some employers may wish to enhance their nanny’s pay and can do so at their discretion. 
  • Accommodation, we recommend that the nanny has a private room in order to give them the appropriate downtime.
  • Hours of work and days off, we suggest you discuss this in advance of your holiday so you can set expectations and avoid any future disputes. 
  • It’s also worth clarifying details such as whether the nanny will be coming out for day trips with you, will be eating with you, whether or not they’re expected to do chores, etc. 

Discussing these things in advance will help you avoid any uncertainty or awkwardness while you’re away!

This blog was written in collaboration with Nannytax, the award-winning and UK leading nanny payroll experts with over 25 years experience. 

Discover more about Nannytax here. 

What is nanny insurance and do I need it? 

Nanny insurance provides financial protection for you, in the event of an incident occurring while you are carrying out your professional duties. 

Nanny insurance provides financial protection for you, in the event of an incident occurring while you are carrying out your professional duties. 

Why do I need nanny insurance?

  1. Nanny insurance is important personal protection for you. Accidents can happen, and this protection means that you have some cover in place should something happen whilst children are in your care.
  1. Nanny insurance encourages a positive working relationship between you and your employer. By taking out an insurance policy, you are showing your employer (or potential employers!) that you have been proactive in putting protection in place. Plus, having a nanny insurance policy is in your employer’s best interest as it means eligible parents can benefit from government support schemes, such as Tax-Free Childcare! 

  2. Having insurance enhances your professional status. Nanny insurance is a part of Ofsted registration, and many parents actively look to hire Ofsted registered nannies. So, having nanny insurance could make you more employable and help you to stand out against other candidates!

Where can I get nanny insurance? 

Nannyinsure is a specialist nanny public liability insurance that is recognised by Ofsted. Brought to you by Nannytax, who have been supporting nannies in the UK for more than 25 years. You can get Nannyinsure for just £59 (previously £79!) To learn more, click here.

This blog was written in collaboration with Nannytax, the award-winning and UK leading nanny payroll experts with over 25 years experience. 

Discover more about Nannytax here.