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Help! p/t term time nanny and annual leave calculation (nanny nick are you about?)

(19 Posts)
Lcy Fri 27-May-11 18:58:19

I am hoping NannyNick can help me out here as from the past threads I have been reading it seems to know alot about this area! But help from anyone would be appreciated.

We are in the process of hiring a nanny who will work 2 days a week in term time only (so 39 weeks a year). She has agreed to take her annual leave in the school holidays. So i am guessing she will actually be employed with us for around 44 weeks (inc annual leave) but I can't work out how to calculate her annual leave allowance exactly.

Could anyone help?

nbee84 Fri 27-May-11 20:13:18

Holiday entitlement fot tt only employees is currently under review by the gov, so no on-line calculator is available at the mo.

I've just finished a tt only job and if I remember correctly it worked out at about 4.8 weeks per year, I negotiated 6 weeks in my contact because of my experience and willingness to work tt only. So by paying her for 44 weeks per year you are covering the minimum entitlement. Why do you need to calculate the exact amount?

I was also paid like a teacher - annual salary/12 so that I had an income each month. This worked well but did mean that when the job ended part way through the year the calculations for my final salary payment were a bit more complicated.

nannynick Fri 27-May-11 21:00:20

The old system went along these lines:

~~~ Example ~~~

If an employee works 40 hours a week (A) for 40 weeks of the year (B), they work a total of 1,600 hours a year (C), or 34.48 hours a week (D) over 46.4 weeks of the year (52 weeks - 5.6 weeks).
The holiday entitlement is 5.6 weeks x 34.48 hours a week = 193.09 hours holiday for the year (E).

Calculation formula
AxB=C
40 x 40 = 1600

C ÷ 46.4 = D
1600 ÷ 46.4 = 34.48

5.6 x D = E
5.6 x 34.48 = 193.09 hours holiday entitlement per year

~~~ End of Example ~~~

However the guidance is under review, so it isn't clear what is supposed to happen now.

Perhaps look on it more simply...
Your nanny works 2 days per week. Assume for Holiday Purposes that they work all year round. Then it's 5.6 weeks x 2 days = 11.2 days.
Round that up to something that fits - how about 12 days?

You want them to work all those days that fall during school term time. However there may be bank holidays that fall on a working day. What do you do with those - do you need them to work? If not, they could take the bank holiday as part of their annual leave.

So if they work 39 weeks (78 days) then could you add 12 days to that, giving 82 days paid in total? Is that affordable?

I would suggest calling ACAS on Tuesday to ask for their help, given that the guidance for term-time workers has been removed and is under review. ACAS Helpline: 08457 47 47 47 (SayNoTo0870 = 0115 900 2670)

Anyone else got any suggestions for how term-time workers holiday entitlement is calculated, when their holiday is restricted such that it can not be taken during term time?

Lcy Fri 27-May-11 21:30:30

Thanks that is really helpful and I will give ACAS a ring.

I wanted to calculate the exact amount because I don't want to short change the nanny and want to be able to show her how I came up with the figure.

Thanks again

mranchovy Fri 27-May-11 23:59:35

The calculation detailed here shows that an employee is entitled to 12.07% of the time she works as holiday.

So if she works 2x39=78 days she is entitled to 9.42 days holiday. I'd round this up to 10, which confirms the 44 weeks you guessed in the first place!

As others have hinted at, for national insurance purposes it is better to spread this payment over 12 equal monthly payments, or if paying weekly, multiply the weekly wage by 308 (the number of days in 44 weeks) and divide by 365.

If you do call ACAS, do report back what they say - sometimes they are not very good at this sort of thing grin

Lcy Sat 28-May-11 07:21:05

Thanks very much. That is really helpful smile

eeyore12 Sat 28-May-11 07:36:44

I had a job where I had to worked term time only and couldn't take hol during that time, I worked there 2 days a week.

I got paid for the weeks I worked plus the equv of 4 weeks hol so I got paid for 44 weeks a year as none of the bank hols fell on my working days I got the extra couple of days to take me up to the min allowed. They paid me the same amount each month though as it was easier to work out my bills and for them to know how much each month to pay out.

nannynick Sat 28-May-11 14:08:50

I did a term time only job in the past, so thought I would add some information about some complications:

Splitting pay over 12 months can be good, though creates a problem if someone leaves part-way through an academic year. You need to pay them for work done.

Someone leaving part way through the year can also cause complications on holiday entitlement - this is where the 12.07% thing may work out better to use.

If someone leaves at the end of Summer term (so say in late June/early July) and are paid split over 12 months (Sept to Sept), they still get paid in July and August, so won't have a P45 until the August payroll run. Not a big issue, as new employer can use a P46 and the tax office can look at overall income over the financial year, should there be any overpayment (or underpayment) of employee tax/ni. P60 would need to be generated the following April/May for end of financial year.

Having done term time only work in the past, I would not consider doing it again. Finding other work for the summer holidays proved to be hard. It just didn't suit me that well - whilst having lots of time off work, the lack of pay during a lot of that time became an issue.

Notice period - when would you be wanting them to let you know that they were leaving, or how much notice would you want to give them that the agreement was ending? Is 4 weeks notice enough? I gave a terms notice, which we have verbally agreed at the outset though 4 weeks was written in the contract.

nannynick Sat 28-May-11 14:13:25

A Question... payment for statutory annual leave should be made at the time when leave is taken - least that's how I understand it - so if pay is split over 12 months, then is that still Ok given that payment for the leave is not being made at the time but could be being paid later?

Lcy Sat 28-May-11 19:46:04

Hello

I won't be splitting the pay over 12 months as the nanny has asked to be paid for the weeks she is working.

She has children at school so does not want to work in the holidays so it works well for both of us. We have a back up plan (MIL to the rescue) if her children are unwell and also if it just doesn't work out. However, I am hopeful as she has just finished a similar job after 3 years working for a friend of mine (only leaving as children all at school) and I have seen her with their children and she is wonderful.

Many thanks for your advice

nbee84 Sat 28-May-11 20:47:40

It's great to find yourself a nanny through a personal recommendation and that you have seen in action grin

Just wondered, how and when is holiday pay paid to the nanny when she is paid for each week that she works?

Lcy Sat 28-May-11 21:49:53

I was assuming I could pay her for an additional 5 weeks in the summer holidays. I will check with my nanny paye company that it is ok. All very complicated and but very worth it.

mranchovy Sun 29-May-11 19:06:02

Wow, there's a lot to look at here!

I won't be splitting the pay over 12 months as the nanny has asked to be paid for the weeks she is working.

Thanks to the European Court, it is no longer lawful to pay rolled-up holiday pay in this way - although many employers (including some household names) continue to do it because many employees with irregular work patterns prefer it. It is also much simpler to calculate and you don't have to go through the calculations in this thread - just add 12.07% to her pay each week and call it 'holiday pay' (you must show this separately on the payslip).

Assuming she earns at least £182 for each week she works she will pay £219 additional NI (and you will pay £246 more) over 39 weeks than you would if you paid over 52.1 weeks/12 months.

A Question... payment for statutory annual leave should be made at the time when leave is taken - least that's how I understand it

Correct, that was the judgement of the European Court I referred to above.

* - so if pay is split over 12 months, then is that still Ok given that payment for the leave is not being made at the time but could be being paid later?*

That's not clear. The law only applies to statutory annual leave (of 5.6 weeks) so firstly a court would need to decide which part of their non-working time was statutory annual leave. Then you would need to consider how much pay is actually due during the SAL - is it the same amount as is being paid anyway, is it 52/39 of that amount, or 52/44 - there are arguments for each of these answers. But because both employees and employers are better off with 52 week/12 month payments, nobody is going to go to court for this to be decided.

Splitting pay over 12 months can be good, though creates a problem if someone leaves part-way through an academic year. You need to pay them for work done.

Not necessarily. The contract may be written so that the pay is £x per month whether you work all, part or none of the month. All you then need to do is pay for any SAL that has been accrued but not taken, which will generally only be the case (with school years) if you leave in the first half of the Autumn term.

Someone leaving part way through the year can also cause complications on holiday entitlement - this is where the 12.07% thing may work out better to use.

As above, in most cases people will have had more than their 12.07% statutory entitlement when they leave so there is nothing to pay.

If someone leaves at the end of Summer term (so say in late June/early July) and are paid split over 12 months (Sept to Sept), they still get paid in July and August, so won't have a P45 until the August payroll run. Not a big issue, as new employer can use a P46 and the tax office can look at overall income over the financial year, should there be any overpayment (or underpayment) of employee tax/ni. P60 would need to be generated the following April/May for end of financial year.

This is not a big problem - tax will always be underpaid in this situation so the employee is (temporarily) better off. P60s are not given to employees who leave before 6th April.

Notice period - when would you be wanting them to let you know that they were leaving, or how much notice would you want to give them that the agreement was ending? Is 4 weeks notice enough? I gave a terms notice, which we have verbally agreed at the outset though 4 weeks was written in the contract.

Very good point. Unless there are special arrangements for holiday pay (rather than the 12.07% statutory accrual) you should always have at least until the day before the start of the next term otherwise you could lose out on the long holiday that you have accepted a lower annual salary for. And a verbal agreement is not enough, if 4 weeks is written in the contract then it is going to be difficult to win a claim that you should receive more.

mranchovy Sun 29-May-11 19:10:33

Oops, missed one grin

I was assuming I could pay her for an additional 5 weeks in the summer holidays. I will check with my nanny paye company that it is ok. All very complicated and but very worth it.

That is OK (because you are saying that 10 specific days in the summer are her SAL and you are paying for them at the time she is taking them). It also saves part of the additional NI lost so only costs £135 for her and £152 for you.

keanandable Mon 01-Aug-11 08:16:54

I was on a fixed wage of regardless of how many hours i worked. roughly 10 to 15 hours per week. before and after school hours, 500 pound per month. I paid my own petrol out of that. We are now changing it to hourly rate. so we are meeting up to discuss hourly rate, petrol expenses, holiday pay. We live in the northeast of England. I have worked for the family for 3 and a half years at that fixed amount. What a headache trying to sort this out HELP!!!

nannynick Mon 01-Aug-11 08:26:27

Keenandable I presume the £500 per month figure is Gross.
£500 a month = £6000 a year
15 hours per week x 52 weeks = 780 hours
So about £7.69 an hour.

Perhaps aim for around £8 Gross an hour, with then mileage paid on top. Could the hours be fixed, so that you were always paid for say 15 hours a week regardless of if you worked 10 or 15? Any additional over 15 would then be overtime.
For holiday details see things mentioned in this message thread.

Oligo Mon 01-Aug-11 15:35:23

Just to add if nanny is not paid during e.g. term time holidays, this might coincide with a maternity leave/pay 'relevant period' before her qualifying date. This would affect calucualtions about how much SMP she receives. This could disadvantage the nanny to the extent she might not be entitled to any SMP from the employer despite earning a signifcant amount the rest of the year.

keanandable Wed 03-Aug-11 06:48:22

I have had my meeting to discuss changing over from a fixed pay to hourly pay. Ready for this.....
7.50 per hour, 25p mileage at the moment i travel 16 miles per day but would only be able to claim for 8 as the other 8 are from my home and back,would work out at 2 pound a day, however now i am now expected to travel three times a day as she wants me to go home for an hour on the evening then return an hour later to stay for an hour.
10 hours per week. 4 weeks holiday, NO pay for bank holidays, and if she goes to India for weeks at a time i won't get paid.

The moral of the story is...... I have left, but said i would stay until she finds someone else. So thank you so much for your advice

keanandable Wed 03-Aug-11 14:19:36

That was meant to say but thank you anyway for your help, not, so thank you

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