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About to hire another family's au pair a few hours a week, what do I need to do regarding the legal/tax stuff?(10 Posts)
She is an au pair with another family, I don't yet know exactly how much they are paying her but will find out.
I am planning to hire her for three hours three times a week, at a total cost of £90 in her pocket.
If things work well I will possibly extend the hours in a few months time. But not necessarily.
How will it work pay wise? Do I need to be registering as an employer and/or do I need to be adding on tax and NI, if so this would significantly increase the cost to me obviously and mean I am paying more like a nanny rate...
I agreed with her £10 per hour while thinking it would be ok just to pay her this in cash or transfer or whatever but having read some threads on here I am now worrying that this is not ok.
I think I had just naively assumed I would pay her the same way as I pay my cleaner ie cash each week and paid holidays agreed in advance...
Can I just pay her that way, eg cash, cheque or bank transfer, with paid holiday agreed, or is that waaaaaaay off the mark? And do I instead need to be doing a whole payroll thing...?
Does it depend what her host family are paying and/or their arrangements with her?
I should add that I want to do everything right and am neither wanting to exploit anybody or be a total muggins...
As she already has a job you're into payroll territory I'm afraid. Using tax code BR and the fabulous mranchovy I make it £113 gross per week. If her other family are paying much less than the full allowance and you get her to split her tax code it could be less.
You do to set up a contract too, which specifies what the arrangement is with holidays etc. this is particularly important as she will probably need to balance this around what her host family require her to do, especially if they take her away with them.
Oh dear... Does this mean I am employing my cleaner (who has several other jobs) illegally..???!!! I thought I was being a good boss, I pay her well over the going rate and always pay for holiday time!
Nonono Your cleaner can be legitimately self-employed. But because you require this au pair to turn up at a time of your choosing, to your house, to do as she's told, using equipment you provide etc it makes it an employment relationship.
Cleaners are well known for being self-employed, and sort out their own tax and NI. If she said she couldn't do, say Tuesday 9-12, and was coming one week on Thursday 1-4 you'd go 'ok', but that's unlikely to happen with someone providing childcare. I's not impossible of course but the dynamic tends to be that you are the one in control of how business is done, whereas with your cleaner you contract her to do work and to a certain extent have to fit around her availability.
Thanks nom de clavier!
Have just emailed the host family to get some more info...
Really dozy about this kind of thing, am I the only person who thought it would be OK to just pay £90 per week cash...? Do other people do this btw? Mentioned it to a friend and she thought I was crazy to be worrying as she would just pay cash and leave it at that...
Depending on the citizenship of the au pair there may also be visa restrictions for what you're proposing.
I think most people would just pay the cash, TBH. Not saying that's right, but... Mind you, I'm not sure how it's that much different from paying a babysitter cash in hand for a couple of evenings a week (I'm sure there must be a legal difference!)
Thanks FamiliesShareGerms... I mst admit I was just assuming the same until I began to investigate... I don't want to do anything wrong and I really want to be a good boss... As I say, my friend thinks I'm nuts and would just pay the cash for a 90 quid a week job...
Perhaps ask a nanny payroll company or HMRC New Employers helpline for advice. At that pay amount, there may well be no Employee or Employer National Insurance. There might be a small amount of income tax, depending on how much the person earns from other work.
So the added cost to you is doing the payroll itself, so £150 roughly a year to use a nanny payroll company, or you could do it yourself using HMRC PAYE Tools and writing out your own payslips. Personally I would use a payroll company incase anything crops up that complicates things. They produce the payslips for you, remind you when to pay HMRC, do end of year forms, basically deal with most things.
Question is, to do things legally, do you feel it is worth £150 a year? You already feel it is worth paying them for time off on holiday - which you would not usually be doing for a cleaner or babysitter. So you are already coming across as someone who wants to be a good employer and do things right, even if other people in the situation may pay cash in hand and hope for the best.
I don't think it's a case of do you think it is worth £150 a er approx to do things legally, it is more a case of do you think it is worth the approx £3000 fine if you are found out that you have employed her (which you will be doing) and have not been paying tax and ni on her behalf.
If she can say when she will be doing the hours you need and is able to change those at short notice or send someone else to do the job then she could poss reg as self employed and be liable to pay her own tax and ni, but I am not sure if her nationality will have an affect on if she am be self employed in this country.
You do sound like you are a great employer/client not many cleaners I know would get paid holiday and as a nanny who has come across too many families looking to not pay tax and ni on their nannys behalf, I would like to thank you for looking to do the right thing.
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