If you are employed in the UK as a Nanny in a salaried position for someone else (an employer eg an individual, family or nursery) you will need to pay tax through the PAYE (Pay As You Earn) scheme. It is the responsibility of the employer who must register as an employer with HMRC (Her Majesty’s Revenue & Customs) to operate the PAYE scheme on behalf of the Nanny. It is also the responsibility of the employer to make tax and national insurance (NI) deductions from their employee’s salary. For information on employee tax and national insurance issues, see our PAYE (Pay As You Earn) Scheme Fact Sheet.-
Tax code splits are normally associated with “Nanny share” situations (see our Nanny Shares Fact Sheet). Splitting the tax code means proportionately splitting the tax free allowance between all the employee’s employers according to the time worked for each of them. For example, if a nanny works for two employers for half of the week each, then the tax code would be split 50/50. If the tax code isn’t split it, means that the first employer gets the benefit of the nanny’s full tax free allowance and the second must pay the remainder of the tax payable. For advice on tax code splits see our Tax Code Splits Fact Sheet.
The Nanny profession is one of the last remaining in the UK in which salaries are commonly agreed in terms of net pay (i.e. post tax deduction take-home pay) rather than gross pay (i.e. pre tax deduction pay). It is a historic anomaly that persists despite widespread advice to the contrary. A net salary agreement can have serious financial implications for both nannies and employers. For further information and clarification on this matter, see our Net Pay and Gross Pay Arrangements Fact Sheet.-
We are frequently asked by our members about salaries. What constitutes a fair and reasonable salary? Without comparative data it can be difficult to asses. We have compiled data calculated from actual salary data collected in the 2011 Nannytax Wages Survey to provide you with information on weekly wages by region. Figures are rounded to the nearest pound and are intended for guideline purposes only. See our Nanny Pay Scales Fact Sheet.-
The term “nanny share” relates to a situation in which a nanny works for more than one family, for example working two days a week for one family and three days a week for another. Such arrangements can readily complicate issues regarding contractual arrangements, salary calculations, tax deductions and holiday leave entitlement. For clarification on “nanny share” issues, see our Holiday Entitlement and Nannies in a Share Fact Sheet.
Parents who employ a nanny in their home take on the same legal responsibilities as a commercial employer. Many parents do not realise this and assume that because it is a private arrangement and employment occurs in a domestic setting, the usual rules don’t apply: but they most certainly do! Nannytax can take care of most of the responsibilities as well as provide comprehensive advice, relieving employers of the headache of payroll administration. For more information see our Employer’s Responsibility Fact Sheet.
Childcare vouchers are a form of ‘Employer Supported Childcare’, a voluntarily scheme that employers can provide for their employees to help towards the cost of childcare. For more information see our Childcare Vouchers Fact Sheet.-
As an employee, a Nanny qualifies for Statutory Maternity Pay (SMP) if employed for 26 weeks prior to the ‘notification week’ and earning at least £107 per week. For more information on SMP see our Statutory Maternity Pay & Leave Fact Sheet.
© Nannylink (Training) Ltd. Registered in England and Wales. Company No 04652533