Our recommended partners at www.PayrollForNannies.co.uk provide payroll advice for parents and have created this content.
The standard tax code for tax year (19/20) is 1250L, this then means an employee (a nanny) can earn £12,500.00 per annum before they pay any tax. This figure is then spread over the relevant pay periods in the tax year (52 if weekly and 12 if monthly) this then gives the tax-free allowance for each pay period.
This can only be used by one employer (parent), and if nanny gets a second job Basic Rate tax must be deducted. Failure to deduct Basic Rate tax will cause an underpayment of tax to the nanny. The nanny will then either get a demand of unpaid taxes or her tax code will be reduced.
The rates for this tax year are:
| Weekly Gross Earnings | Percentage Tax Paid |
| Up to £240 | 0% |
| Between £240 and £961 | 20% |
| Between £961 and £3125 | 40% |
| Above £3125 | 45% |
A nanny’s tax code may be increased if she is married and her husband does not use all of his tax-free allowance (£12,500.00).
Changes to Student Loans from 6 April 2019
Increase in Student Loan Plan 1 and Plan 2 thresholds.
The Department for Education (DfE) has confirmed that from 6 April 2019 the thresholds will increase to:
Plan 1 – £18,935 (£364.13 weekly)
Plan 2 – £25,725 (£403.84 weekly)
Student loan deductions will remain the same at 9% for Plan 1 and Plan 2 loans.
To make sure you are paying the right amount of tax/being paid all you should be, your employers, the family, can contact www.PayrollForNannies.co.uk for advice.