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Nannies and maternity pay

(8 Posts)
outthere Thu 15-Sep-11 17:39:41

Hi all,

Sorry if this has been done to death...

Just wondered what the deal is with paying for a nanny's maternity leave? Am I right in thinking that, as her employer, we would have to pay 6 weeks at 90% of full pay followed by a period of SMP?

How long do you pay SMP for and can you claim anything back from the government?

Really don't know what to do as a nanny is absolutely the right thing for our family but that situation would cripple us financially. Rightly so I can't discriminate against giving someone a job based on whether or not I think they might have thier own children sometime soon...

minipie Thu 15-Sep-11 18:15:28

You should be able to reclaim most or all of it from the govt.

here is a guide which may be helpful

Gastonladybird Thu 15-Sep-11 18:34:47

You dont get back holiday pay which she accrues when off. I forgot about that so had an expensive surprise at End of maternity leave

minipie Thu 15-Sep-11 18:57:24

good point Gaston - though presumably you can ask her to take the holiday as holiday rather than paying in lieu?

Gastonladybird Thu 15-Sep-11 19:25:01

You still pay it though as (s)he won't be working when on holiday

mranchovy Thu 15-Sep-11 20:32:09

That first 6 weeks at 90% is also SMP, and this is followed by 33 weeks at £128.73 (or the 90% figure if this is less - for instance for a PT nanny). Together this is termed Ordinary Maternity Leave.

Small employers can recover 103% of SMP from HMRC, including that paid at 90%, but during that 6 weeks you still have to pay Employers National Insurance. So if your nanny earns £500pw, initial SMP will be £450pw and the NI on that will be £43.33, but you can reclaim £463.50. After 6 weeks SMP will drop to £128.73 so you will be reclaiming £132.59 and there will be no NI to pay.

So the net cost of SMP is actually fairly small, or (for part-timers) maybe nothing at all. However at the end of her maternity leave she is entitled to take the holiday that has accrued - so if she is on ML for 11 months she may be able to 'return to work' for a month which she actually takes as paid holiday! And she can hand her notice in at the beginning of that month. You don't get any of that back from the government, and you can thank Europe for it.

Gastonladybird Thu 15-Sep-11 20:41:36

That's exactly what happened to me mr anchovy

outthere Thu 15-Sep-11 21:19:18

Thank you everyone, that's really helpful and really puts my mind at ease smile

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