Employing a nanny for the first time can be daunting, especially if you've never employed someone before. Nannytax want to help make the process as smooth as possible for you, so we’ve answered some of the top questions we get about employing.
I’ve found a nanny – what happens now?
Find out the Total Cost of employing your nanny
The cost of employing is made up of two main parts:
You can find out how much your Total Cost might be from the nanny’s gross wage using our Gross to Total Cost calculator here >
Beware the pitfalls of a net salary
If you do decided to agree a Net Wage with your nanny that means that you are guaranteeing the money that is paid into her bank account every week or month. That means, instead of the cost being made up of just two parts, it’s actually made up of four:
- the nanny’s net pay (the money she gets in her pocket every week or month)
- the nanny’s Income Tax and National Insurance Contribution (which you will have guaranteed to pay on top of the nanny’s take home pay)
- other deductions from the nanny’s salary, such as Student Loan repayments or pension contributions – because you have agreed a net wage, you are agreeing to make these payments over and above any other payments
- the Employer’s National Insurance Contribution
We've agreed a salary with our nanny. What next?
Check your nanny has the right to work in the UK
It’s important to never assume that your nanny has the right to work in the UK, but it isn’t difficult to check. Simply making sure you check an ID document (a passport for example) and their visa, if they require one, is often enough.
You can find out more about the checks you need to make here >
Get a nanny contract in place
You must make sure you have a Contract of Employment in place between you and your new nanny. Nannytax provide a sample contract as a standard part of our service, and the employment law experts in Nannytax Legal can help you to customise this to your specific situation.
Ask the nanny for her P45
Once you have everything in place you will need to ask the nanny to provide the P45 from her last job. If the nanny doesn't have a P45 you’ll need to fill out a P46 form with her – Nannytax will provide this if required.
What about paying all the nanny’s tax? How do I set that up?
Nannytax will take care of it
When you sign up to Nannytax, we will send you two forms to fill out and send back that will allow us to work with HMRC on your behalf. Once you’ve returned the forms to us you don’t need to worry about setting anything up.
What financial support is available to help with the cost of paying my nanny's wage?
Tax-Free Childcare is a new government scheme, being rolled out from April, that will be available to around two million working households to help with their childcare costs.
Working parents with children under 12 (under 17 for disabled children) can set up an online childcare account to pay their childcare providers directly. For every £8 parents pay in, the government will add £2, up to a maximum contribution of £2,000 per child, per year (£4,000 per year for disabled children). To qualify, parents must be in work and each earning at least £115 a week and not more than £100,000 each per year and nannies must be registered with Ofsted. If you would like further information about this take a look at our top five Tax-Free Childcare Questions: https://www.nannytax.co.uk/financial-support/tax-free-childcare-top-five-questions