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Employing a Nanny - FAQs about Nanny Tax
What do I have to do when I become an employer?
Domestic employers have the same legal obligations as commercial employers under UK employment law. If you employ a nanny and pay them above the weekly threshold (£105 in tax-year 08/09), you are legally required to register with HMRC as an employer and operate a PAYE scheme on their behalf.
How do I pay my nanny's tax and NI?
As a small employer you will pay it every three months using a slip from your scheme payment booklet provided by HMRC. When you use Nannytax services, they will do these calculations for you, based on the information you give them with regards to the hours your nanny works and her rate of pay.
What if I don't register and just keep quiet about it?
Not declaring employment, or only declaring part of your nanny’s salary, to avoid tax, is a criminal offence, which can potentially result in heavy penalties and career–damaging publicity.
Why can't my nanny do this herself?
Self-employment is not an option as nannies do not meet the HMRC criteria for self-employment. If liability to pay tax is not declared to HMRC, and this comes to light, then it is you, the employer, and not your nanny, who will be pursued for payment.
What should I do as an employer with a PAYE scheme?
- Register as an employer
- Set up and operate a PAYE scheme on your nanny’s behalf
- Keep tax records on her behalf
- Provide your nanny with regular payslips
- Provide her with an employment contract
- Pay regular income tax and NI contributions
- Pay employer’s NI contributions
- File an employer’s annual tax return
Is there any risk involved if I do the paperwork myself?
If you miscalculate and underpay your tax liability, you will be charged interest on the balance. If you file your Annual return after the annual deadline (May 19th) you will face an automatic penalty of £100 for every month filed late.
What is the gross salary I’ll have to pay for my nanny?
Please see the nanny tax calculator to calculate the total cost of hiring a nanny.
Other Childcare related questions
Aren't au pairs, nannies and a babysitters the same thing?
No, let us explain:
- Au Pairs – minimum or no childcare experience, basic English, they are allowed to work a maximum of 25 hours a week, 5hours a day. They come mainly from European countries and arrive in the UK to learn English. Au pair would be mainly live in and you need to provide their accommodation and food, Salary expectation: £70 - £100 per week.
- Nannies – experienced or qualified in childcare, fluent in English. Standard working week would be around 50 hours. Can be live in or live out. Salary expectations: £300 - £500
- Babysitter – Occasional carer who arrives at your house mainly in the evening hours and cares for your children while you’re away. They are paid hourly £7- £10
How long does the process take from registration to finding the right nanny?
It depends on how many suitable applicants are available for the family's start date and also meet the family's requirements. It can happen as quickly as a couple of days, or as long as a couple of months depending on who is available and finding the right match.
Where do your nannies come from?
Royal nannies place nannies from various countries including the UK, Europe, Australia, New Zealand, Canada, Philippines, and the US.
How much does it cost to employ a nanny?
Nannies' salaries vary depending on their experience and any qualifications. The following is a general guideline based on a 45-50 hour work week Monday – Friday.
- Live in: 300 – 350 net per week
- Live out: 400 – 500 net per week
- Hourly rate: £7 - £12 an hour
What is the agency's placement fee?
Royal nannies charge one off placement fee of 6 times the nannies weekly salary for all standard nannies, 7 times the weekly salary for bilingual nannies in the UK and 25% of NET annual salary for overseas placements.
How do we pay for the service?
You will receive an invoice which can be paid by cheque, cash or online money transfer.
What type of duties are nannies willing to do?
It is variable depending on the family's needs, typically there are
three categories:
- Nursery duty nanny – which includes all nursery duties related to the children, children's laundry, children's meals, keeping the children's areas, the kitchen and common areas tidy and organized
- Nanny/Housekeeper – All of the above with additional housekeeping duties, which may vary depending on the families requirements.
- Nanny/house-manager – The nanny is also responsible for running the household, e.g. arranging for repair people, PA staff, errands, grocery shopping etc.
Are the nannies First Aid trained?
Most nannies have a current first aid certificate; if the certificate has expired we usually suggest that the nanny takes a course to update the certificate.
Do you check all your nannies' references?
Yes we do – all of our carers need to provide references from their previous employment which are checked by a member of our recruitment team.
Will there be a contract between nanny and family?
Once a nanny has accepted a position, Royal Nannies will assist the family in putting together a contact to ensure that everything is clear in the beginning and there are no misunderstandings.