Anyone who employs domestic staff should be aware of the responsibilities that come with being an employer:
- You must register as an employer with HMRC.
- You must supply a contract for your nanny/staff member.
- A PAYE scheme will need to be operated for your employee.
- Tax and national insurance (both employer and employee) requirements must be adhered to.
- Payslips outlining every deduction and addition must be supplied.
- Annual returns need to be filed.
The Cost of a Nanny or Housekeeper
When you choose to employ a Nanny, it is vital that you register with the Inland Revenue, without delay. We can provide the details of a company who will do this for you and offer a payroll service, for an annual fee. Please see below for an example of costings for employing a nanny or household staff:
When you employ anyone over the age of 18, the National Minimum wage applies, except for in cases where that nanny lives as part of the family and the accommodation consideration is not separately accounted for.
The best nannies can command excellent rates of pay for their services. The current rate is £8-£12 per hour for a full-time, experienced nanny, with weekly salaries ranging from £300-£550 depending on hours, duties and experience. Naturally we can advise about the best ways in which to arrange payment.
NOTE – Net figures do not apply to job shares and multiple jobs, which will have a different tax and NI liability. Also, contracts should reflect an employee’s gross pay, not Net.
- Full-time Daily Nanny = £450 - £700 net
- Live-in Nanny, not including bills and food - £350 - £520 net
- Nanny Daily Rate = £90 - £120 net per day for part-time work, e.g. 3 days
- Part-time nanny = £9 - £12 net per hour
- Before and After School care (part time) = £10 to £13 net per hour
- Housekeeper – full time, live-out = £260 - £500 net (based on 8 hour day)
- Part-time housekeeper = From £9 net per hour
- Baby sitter = * from £8 total per hour
- Temporary Nanny = * £12 total per hour gross
- Maternity Nanny = */ ** from £15.00 total per hour. Multiple rates by arrangement with the employee.
**Note: A Maternity Nanny will commit to a set start. Should your baby be late, the nanny may charge 50% of each week’s salary until commencement.
*Note: The stated rates for a Maternity Nanny, Babysitter and temporary staff includes tax and NI since such staff are often self-employed.
The figures stated above have been calculated based on a tax code of 522L (the standard personal allowance) and apply to someone who only works for one employer. Should there be a second job, the figures are not applicable.
The figures have been provided as a general guide and should not be taken as automatically applicable in all circumstances. PAYE for Nannies Ltd recommends that all clients check their figures personally and accepts no liability for inaccurate calculations.
National Minimum Wage
At present, the rates that apply from 1 April 2022 are as follows:
- For employees aged 18 to 20 - £6.83 per hour
- For employees of 21 to 22 years are: £9.18 per hour
- For employees aged 23 years or above - £9.50 per hour
Childcare and Household Staff Statutory Maternity Pay (SMP)
All employers must pay Statutory Maternity Pay if an employee who is receiving a minimum of £90 falls pregnant during employment. SMP is taxable and stands at 90% of the gross ware for the 1st 6 weeks, then at £156.66 flat rate (or 90% of normal gross wage, if less) for the subsequent 33 weeks. It is often reclaimable from HMRC. Unpaid maternity leave may also be taken, until the whole leave period totals 12 months.
Childcare and Household Staff Statutory Sick Pay (SSP)
Following a minimum of 4 consecutive days taken off sic by an employee, SSP should be paid. There are complex eligibility rules, but the current rate of SSP is £99.35 per week, some of which may be reclaimable from HMRC. If sickness extends to several weeks, a greater proportion of SSP may be reclaimable. If the SSP paid exceeds the basic amount, the basic may be reclaimed in certain circumstances. The period for which SSP is payable extends to up to 28 weeks.
Nannies with multiple employers
In the instance of a nanny having more than one employer the rule are as follows:
The original employer with be liable to apply all the employee’s tax allowance (currently £6035) to that employment. Any subsequent employer must tax all pay at the basic rate and deduct 20% tax from the gross salary. The second employer therefore tax on a relatively high tax burden, but if they use our payroll services, we can arrange that the nanny’s allowances are proportionate to the hours she works, HMRC permitting. This reduces costs for the second employer, but raises them for the original employer; however, the nanny’s pay will remain the same.
The above information is solely a general guide and we accept no responsibility for inaccurate calculations or errors.