Tag: employing a nanny

Spotlight on Compassionate Leave

Recently we have received a couple of questions on our Facebook page from nannies who have sadly been bereaved and wanted to know what their rights were and what was normal for employers to offer.

As employees nannies are entitled to time off for dependants, which is unpaid, and exists to enable them to deal with emergencies such as arranging or going to funerals. Any member of their immediate family or someone living in their household is a dependant, but this can also extend to anyone who relies on your nanny for help in emergencies.

It is rare for nanny contracts to have a section which deals specifically with compassionate leave, although employment experts say that mentioning bereavement leave specifically in contracts has a positive impact on employer-employee relationships. In the absence of contractual arrangements paid time off is at the employer’s discretion, and you are expected to be reasonable and consistent in your handling of bereavement. Although paid time off will be appreciated as it removes concerns over finances from the equation it is more important to be sensitive and understanding to your nanny’s needs.

Time off around the death is of course only one aspect of bereavement. Grief can have a profound impact and significantly affect a nanny’s ability to do their job. A nanny who is suffering from grief may visit their GP and be signed off work. This is treated as normal sick leave and not compassionate leave. ACAS produce a comprehensive guide for employers on dealing with bereavement at work if you require further guidance.

Nasty payroll surprises and how to avoid them

It’s the time of year when parents are doing their first payroll run with a new nanny and if your initial sums were out it can be an unpleasant experience discovering that you’ve got a higher bill than you thought you had.

Problem #1 Nanny has another job

Even if it’s a Saturday job, if she had that job first she’ll be on a BR tax code with you, which means no tax free allowance and all earnings taxed at 20%. It used to be possible to split tax codes but HMRC are very reluctant to do that since real time information (RTI) was introduced. If you agreed a net salary then you are liable for all the tax and National Insurance contributions, which can be a lot more than you bargained for.

Problem #2 Nanny has a student loan

Student loan repayments kick in above £325/week (£1,409/month or £16,910/year) gross.  9% of the amount above this salary needs to be paid to the Student Loans Company on the nanny’s behalf, and you’re also liable for this if you agreed a net salary, which if a nanny is earning £2,250 a month is an extra £75. Nannies with degrees are becoming increasingly common, and most of those who have studied in the UK will have taken out a student loan. An even nastier surprise is where you think you’ve employed a nanny and are paying under the repayment threshold but overtime has pushed them over.

Problem #3 Nanny has a special code      

HMRC allocate codes based on an individual’s situation. Most people with one job will have a standard tax code (for 2014 this is 1000L), however if a nanny has to pay back tax which was underpaid in previous years or receives benefits in kind they may have a special tax code which reduces their personal allowance (for example 700L which means they have a personal tax allowance of only £7,000 for the year), increasing your tax liability if you have agreed upon a net salary.

The simplest way to avoid any nasty surprises your end is to agree a gross salary in the contract. That way you know what your costs are, and you deduct the amount of tax (and anything else) your nanny is required to pay rather than adding to your bill.