If you’re employing a nanny for the first time, or even if you’ve done it before, trying to get your head around nanny tax with National Insurance, PAYE and workplace pensions all to be considered and calculated can be very daunting, especially as legislation changes all the time.
We aim to simplify the process of managing your nanny payroll and take the stress out of meeting those employer payroll and other legal obligations.
When you hire a nanny
It is your legal responsibility, not your nanny’s, to ensure that a PAYE scheme is set up and that your nanny’s income tax and National Insurance Contributions (NICs) are paid on time. You’ll be committing a criminal offence if you don’t do this which could mean a big fine.
Paying your nanny
You must provide your nanny with a payslip every time they get paid. The payslip should show their gross wage, the tax and NI deductions made on their behalf, as well as their net wage. Your nanny should keep their payslips in a safe place, as they act as proof of earnings when applying for credit if they take out a credit card, loan or mortgage.
When you subscribe to paymynanny.net we send you, via email, monthly or weekly payslips showing all the correct deductions. Our service will also manage issues such as Shared Parental Leave (SPL), Statutory Sick Pay (SSP), holiday pay and accruals, overtime and bonus payments to name but a few.
We handle P45s when your nanny starts work and when he or she leaves, as well as talking to HMRC if there are any issues that affect your employer PAYE scheme.
What we do not do is pay your nanny or HMRC on your behalf; any accountant or payroll provider offering a payment service via a 3rd party client bank account must be registered to do so with the Financial Conduct Authority (FCA) as this is now a regulated service.
You must also provide your nanny with either an employment contract or a written statement of the terms of their employment, within two months of their starting date.
A standard contract is available for an additional fee. The contract can be modified to suit your individual circumstances.
Every employer now has a legal responsibility to comply with workplace pension duties. This means that if your nanny is over the age of 22 and earns more than £10,000 per year (£833.33 per month) he or she will have to be automatically enrolled into a pension scheme. Even if your nanny earns less than this you will still have duties to carry out and you may even have to set up a pension scheme if your nanny asks to join.
We provide two levels of pension management service and can also help with the set up of a pension scheme. If you are unsure whether your nanny will qualify and whether you need a pension scheme, then please feel free to speak to one of our team who will be able to assist you with this.
Failure to comply with your workplace pension duties can lead to rather large fines and criminal prosecution, starting with a fixed statutory penalty of £400.00.