There has been a rise in live-in nannies, and with that confusion over nanny’s legal pay.
If nanny lives in the family home, is treated as part of the family – eating most meals with them and spending time together such as leisure activities and evening time in the same sitting room, then the national minimum wage does not apply.
The national minimum wage will come into effect for nanny’s who are not treated as part of the family, but instead the employer will be able to use the offset allowance when the nanny is live-in by £7.55 a day, £52.85 for a whole week.
The other scenario is that nanny is given accommodation separate to that of the family, this then becomes a benefit in kind and needs to be declared annually to HMRC.
If there is a benefit in kind, it will mean nanny’s tax code will be decreased and her net pay goes down and as an employer having to pay an additional national insurance on the benefit amount.
The law is very strict, so you need to make sure you know how to proceed with your live in nanny.
