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nanny net/gross pay question(7 Posts)
I'm about to offer a nanny a job which is 16 hours per week over a couple of days. She wants £7 net per hour, but I understand it's better to agree a gross pay. The problem is when I use any of the nanny paye calculators, the gross pay comes up as £7, presumably because we're employing her for 16 hours per week. I know I could be being really thick here, but how do I work out what gross pay to offer? As you can probably tell this is the first time I've employed a nanny!
Does she have another job? If it's her only job then you'll get all of her tax code so £7nett won't get taxed hence the gross being the same. ( Assuming her tax code is 810l ). If she has another job then you'll need someone more knowledgable than me to answer how it works.
Thanks for replying. She will have another part time job in a preschool and she's never done a nanny role before, so I don't think she knows the answer either.
Why is she asking for net then? Surely her other job pays her gross.
I would just offer her a gross wage - decide what you think is fair/can afford and offer that.
Worst case use taxcode BR, then see what the PAYE calculator gives for Gross figure.
Once you have a figure for 810l taxcode and for BR taxcode, consider what figure between those two you are prepared to pay.
How come the nanny is asking for a Net wage per hour when they have not been a nanny before? Other jobs are not paid that way, so I would have thought she would be asking for a gross annual salary or gross per hour as in other jobs.
If her pre-school job is not using all her person tax allowanxe, some may get allocated to your job. At this stage you don't know what the pay situation is in the other job, so don't agree to net pay or working out a gross figure which might give her a certain net figure. Decide what gross pay figure you will offer her for the job and let her decide to accept the job at that pay rate.
In your other thread you say she will be doing a couple of hours a week at the pre-school. A pre-school session may be 2.5 hours, might be 3 hours, probably isn't longer than that, so she isn't likely to be earning a lot if she is doing those hours. She may earn £1000 or less a year from that job.
I think that if the taxcode is split (see MrAnchovy's reply to you on other thread about splitting taxcode) and if she is earning £1000 from the other job, then £7 gross could still be £7 Net when doing 16 hours a week (taxcode 710L perhaps?). If she's earning £2000 from the other job, then £7 gross on 16 hours a week I think still becomes 7 Net if taxcode 610L. (Not sure that is how earnings in another job affect the taxcode.)
Thing is you don't know what taxcode will be allocated to your job and you don't know that the coding won't be changed at any point. It can be changed due to various reasons - repaying HMRC for underpayments for example.
You can change how much you pay them later on. The contract you agree now can give a figure such as £7 gross an hour and if you find that after tax codesplit have been agreed that your nannies take home pay has dropped a lot, then you could agree to increase their salary a little, say to £7.50 an hour Gross. You would try to give pay rises every now and then anyway, so giving one after the probationary period is something you could do.
You need to consider the maximum amount Gross you are prepared to pay and don't go above that. Employers NI I don't think starts to kick in until near £9 an hour based on 16 hours a week. So you don't have employers NI to consider at £7-£7.50 an hour salary. Thresholds for things like Employers NI can of course change, so as time goes by your costs will change depending on how UK taxation changes.
Have you called a nanny payroll company? They will often provide some help for free before you sign up to their service.
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