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nannynick, are you around? And all you other tax experts

(5 Posts)
crougar Fri 01-Apr-16 16:42:54

Quick question;

If I were to take a job where the salary is below the tax threshold, but above the NI threshold, would my employer still need to put me on payroll? Is there a way I could pay my own NI contributions and not be technically 'employed'?

Looking at annual salary of 10k ish so way above the £5-6k limit for NI.

nannynick Fri 01-Apr-16 17:05:36

They would need to do payroll.

To not have to register as an employer they would need to pay less than £112 per week and for it to be your only income. So if they would be paying £10,000 a year, then that is well over that threshold.

If they were to pay £10,000 gross per year, in 2016/17 tax year there would be £232.80 employee national insurance and £260.54 employers national insurance due. Resulting in take home pay of £9767.20

Why would you not want to be employed?

crougar Fri 01-Apr-16 17:17:29

I just thought it would make their life easier if they didn't have to do payroll. They have done it for me in the past using software themselves rather than a nanny tax company, and they found it extremely frustrating, so I was wondering if there was a way to avoid either having to go through all that again, or having to pay a tax company to do it for them. Seems there's no way around it though. Thank Nick.

nannynick Fri 01-Apr-16 17:47:08

A payroll company will cost them around £200 a year. By being your employer they will need to give you employee rights, such as having a 'written statement' detailing your contract agreement (often referred to as a Contract), providing statutory entitlements like Holiday Pay.

Being an employer does increase their costs but they can calculate what those costs are likely to be in advance, so can compare with other forms of childcare. There are pros and cons to each form of childcare, the advantages of a nanny may outweigh the cost over other provide types.

To make their lives easier they can use a payroll company who does everything for them. That does though come at a cost. NannyPaye for example charges £179.99 a year for monthly payroll. There would be additional cost if they need to provide a pension scheme, which is possible if they have been an employer in the past.

There other option would be to use a childminder or nursery but maybe those services are not open the hours they need or do not meet their requirements in some other way. They need to look at all the pros and cons and decide what form of childcare will work best for their family and what is affordable.

crougar Fri 01-Apr-16 19:27:21

Thanks Nick. I was their full time nanny previously, for which they employed me, however since the children have been school age, they have used au pairs. The au pairs are paid less than £112 per week so they have not had to deal with payroll etc. They have been struggling with the au pair scenario as it can be a little hit and miss, and I no longer need full time hours, but I would be live-out and therefore on a higher rate than an au pair. Will have a chat with them and see if we can reach a compromise.

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