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69% of nannies still have a Net pay contract - how can we change this?(59 Posts)
Was chatting with @NurseryWorld magazine on Twitter and they said that their recent survey found that 69% of nannies were on Net pay.
Parents visiting Mumsnet will know from reading on here that it is recommended that nannies are paid Gross, as then tax calculations can be done and there are no sudden shocks if the nannies tax code changes.
Do you think that Nanny Agencies are part of the problem - in that many agencies still list jobs as Net?
How can this be changed? Should it be changed - as a parent, nanny, or as an agency, do you feel nannies should be paid Gross or Net?
This thread is 2 years old but I still standby my comment I made 2years ago
I blame the agencies
Looking at jobs on nanny job in my area last night and 99% still say the salary nett
One uses gross and some are coming round and saying gross which would be roughly xxx nett
Nannies also seem to like round figures - ie £8/8.50/9/10 nett where as gross would work out say 9.73 nett iyswim and nannies seem to not like this
I think they're missing the word feasibly.
It's about to get nightmareishly complicated and payroll agencies may well be protecting themselves from the hassle. I'm not going to argue
That may be PAYEfornannies policy, but there is no reason why you cannot continue to operate a net pay agreement after April.
What you cannot do is pay different amounts each week net and tell your accountant/payroll service after the event and get them to sort out the tax - this must be done and reported to HMRC when or before the payment is made.
In case anyone is interested -
My newest employer uses PAYE for nannies to do the taxation and they have advised her, that from April 2013, it will no longer be possible to operate net pay agreements for nannies
See more info here: http://www.payefornannies.co.uk/parents/RTI.htm.
(Sorry, can't do proper links on phone)
I totally agree that the practice of quoting net figures needs to stop.
What with the tax allowances going up so fast, anyone who has agreed a net wage, will really miss out.
If you find that your nanny is already using her tax allowance with another employer, she can apply to HMRC to split the tax code.
If the big chain agencies changed to Gross, then others in my view would follow. So if you are registered with a chain agency, contact them and tell them you want to see job ads as Gross. Especially Tinies, who seem to me to be one of the biggest chains - they do Gross for nursery jobs, so why not Nanny jobs.
There are already agencies which are far more expensive and people use them...
In many ways I think the relative amounts paid in fees aren't a top priority when choosing an agency. Obviously 4x net salary vs 20%annual is going to make a difference but half the time prices are quoted without VAT, agencies with fixed fees don't seem to be any more popular than agencies with fees which work on the multiple basis and the size if the fee is so dependant on the salary you pay your nanny that an agency changing from net to gross to calculate fee payments is going to be relatively insignificant.
Maybe ANA will make it a policy change?
true..... but which agency will be the 1st.... and suddenly be far more expensive then the rest?
But changing to gross gets them more cash...
3x gross is going to be more than 3x net. If anything that kind of fee structure is an incentive to move to gross for agencies!
Just had a brainwave.... on todays thread discussing nanny agencys fees, it seems most nanny agencies charge fees as "X many weeks net salary"
perhaps this is why agencies are keen to work in net, so its easy for them to work out the fees they charge the parents?
Because most nannies don't meet the criteria for self-employment even if they work for many families. They're usually contracted for set hours and do what the parents tell them to even when part-time.
As employees they're entitled to the benefits which come with being employed.
orangina, but in most circumstances nannies ARE employed, and they deserve the protections of employment. I'd agree that nannies working for several families during the week could be self-employed, but otherwise it's just a way for employers to duck their responsibilities IMO.
I haven't read through the WHOLE thread, but I think the salaries should be gross, as it makes it more straightforward for the Employer to work out in total what it will cost them.
To be honest, there are all sorts of things about paying nannies that I don't really understand (and would therefore want to see changed unless a good reason was explained to me). Eg:
Why are Employers expected to pay ALL the tax and NI of nannies?
Why can a nanny not declare herself self employed if she works on a freelance basis?
I will never get a job in my industry where I am not responsible for any of my tax and NI (ie my employer would pay it all), and there must be enough requirement in the market for part time ad hoc childcare that would make sense for nannies to take on a self employed status?
Totally agree with this thread. It was a nightmare trying to sort this out with the nanny we employed. I am not great at maths, and would grind through the figures and end up with a result only to hear 'so what's that net?' aargh! IMO the only possible reason for working in net figures is to avoid tax - i'm NOT saying that any nanny would voluntarily do this but while it is 'the norm' in the sector just to ignore gross pay, it's like a nod and a wink to employers that you needn't really think about it and that most people don't. God knows what the proportion of non-tax-paying employers is out there but it must be higher than in a lot of other sectors.
- parents want to do it to save costs, and because they feel that childcare costs ought to be tax exempt;
- nannies want to do it because they can then undercut competition, and they don't worry about pensions or mortgages because they don't intend to stay here forever. Also one nanny said to me that she wanted cash, to look unemployed, so they can claim benefits.
It's true most unqualified nannies don't know and many non-Brits don't care. If you're here for 2/3 years then what does it matter someone paying your tax and NI or not seems to be the thinking. It's not like in France where working undeclared means you have no healthcare - there's no tangible benefit to declaring your income in the UK until you need SMP/MA or SSP. Even JSA doesn't rely on previous NI contributions.
It's tax evasion and it's wrong but in the long term if you're not staying it doesn't matter for many people so they'll happily accept CIH.
The nanny agencies need to get on board, promoting gross wages.
The colleges need to get on board, making sure that the 'maths' involved in gross versus net wages are included on nannying courses.
Parents need to get tough and ONLY negotiate wages in gross terms.
Our current nanny was quite happy to negotiate a gross wage with us because she understands the implications of each one. She also was told at college about gross versus net.
I've always hired english aussie or nz nannies and they have always wanted their tax paid
not that they have a choice, I pay it anyway
what is it about people that think tax is something that should be paid by other people? grr
>I think most people hiring nannies full time do, don't they? Wouldn't a nanny insist on it in any event?
My impression from 6 years of being an employer is that most people don't pay tax, and most non-British nannies don't care.
Uh - we pay absolutely all tax and NI on nanny salaries and have done for 12 years
Plus give proper printed payslips
I think most people hiring nannies full time do, don't they? Wouldn't a nanny insist on it in any event?
Absolutely SnapFrak - I wonder what percentage of employers paying £600 a week net actually hand over £300 tax and NI to HMRC each week?
And what percentage of employers paying £100 a week for a 1-day part timer with another job are registered for PAYE?
I believe that net salaries encourage PAYE fraud so should be discouraged in any statement of recruitment best practice.
Also agreeing a gross wage gives employers less wriggle room to dodge tax/NI or ask the nanny to handle it.
Nanny benefits from tax allowance changes, doesn't have to worry about splitting tax code for more than 1 job and can easily quote/provide evidence of gross salary when required.
It also makes it easier in a sense to compare different job options. One job is 50 hours, £500 gross straight, another is a complicated nannyshare where you end up with 3 different families paying into a pot, 2 at any one time, 1 day with only one on a lower rate etc and you have to reverse calculations to work out the best way to allocate your tax allowance and how much you end up with whereas gross you can just see it's £x or £y per hour regardless of who the main employer is which means you add up the options and figure out it comes to, say, £550gross all told. It just standardises things which is good when many nannies are faced with choosing between different combinations because FT jobs are hard to find.
As a nanny who recieves net pay I would quite like to go gross the employers never seem keen but whatever way you do it tax and NI still has to be payed
What do you all see as being the benefits to the nanny of agreeing a Gross wage?
One benefit I feel is that an employer can calculate how much it will cost them to employ the nanny.
If an employer offers the same Gross wage to two different nannies, they know how much it will cost to employ either nanny. Don't have to worry about a nannies individual tax circumstances.
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