Talk

Advanced search

This topic is for discussing childcare options. If you want to advertise, please use your Local site.

nanny wages cash in hand

(132 Posts)
janett Sun 06-Jul-08 01:32:59

why oh why do some employers feel the need to offer x amount pay and then when it comes to signing contracts they want to pay at least a 1/3 cash in hand? dont they realise nannys might one day want a mortgage ect.. angry

nannynick Sun 06-Jul-08 09:30:01

I think it is largely due to nannies agreeing NET wages. That needs to stop.

When a nanny agrees a NET wage, the employer has to add on Employees Tax, Employees NI and Employers NI.

When a nanny agrees a GROSS wage, the employer has to add on Employers NI.

Not all employers understand that they DEDUCT Employees Tax and Employees NI from the GROSS wage. It isn't the employers money, it's the nannies.

If they had started working out if they could afford to pay the salary from the GROSS wage, rather than the NET wage, the additional payment to HMRC doesn't seem so high.

Is that making any sense? Does anyone else think that it is the NET v GROSS situation, or are there other reasons why employers want to pay cash in hand?

SueW Sun 06-Jul-08 09:46:33

I think there are some people for whom cash deals will always be a part of their lives and they offer it to everyone they deal with.

Probably going to get even more that way with programmes like that Dom one that encourage people to go for maximum discount (although I notice he never suggests that people ask what deal they can get for cash).

nannynick Sun 06-Jul-08 09:50:21

How the money is actually paid, isn't the issue though. If an employer and employee agree to having wages paid partly by BACs and partly in Cash that is fine.
I think that Janett is saying that 1/3 of the amount is not being declared as earnings - which is the problem. Is that right Janett?

nannyL Sun 06-Jul-08 10:45:03

but nick if you are being paid partly in cash, it is NOT cash in hand.... its only cash in hand if the money isnt declared on your pay slip.

I refuse to be pid cash in hand.... an employer wanted my pay rise to be cash in hand and i said, sorry no, i want it done properly

If no nannies let it happen, it wouldnt happen!

phraedd Sun 06-Jul-08 11:22:58

i only quote gross figures but because a lot (if not most) nannies quote in net figures, it makes my prices seem very high angry

Quattrocento Sun 06-Jul-08 11:31:38

"Probably going to get even more that way with programmes like that Dom one that encourage people to go for maximum discount (although I notice he never suggests that people ask what deal they can get for cash)."

I've never seen the programme but of course he couldn't suggest that people ask what they can get for cash - because it's illegal.

I agree with the OP - the reason the employers do it is because they want to fiddle their taxes - it is grossly dishonest and unfair on the nanny for so many reasons.

nannyL Sun 06-Jul-08 11:35:49

and ofcourse if inland rev find out the EMPLOYERS (ie nannys bosses) will be fined £3k!

IAmNotHere Sun 06-Jul-08 11:43:53

janett - there's also the fact that some people are just bloody tight smile

Agree with nannynick - that's where it comes from, the archaic way in which nanny wages are agreed. And it's understandably galling to be in a position where you feel you're paying your own tax and then someone else's. There needs to be a shift to quote gross wages and emphasize that all childcarers pay tax. No one objects to their childminder paying his/her own tax on their fees. There's just this feeling of paying tax twice over with nannies that doesn't sit easy with many people, and I can get why.

I think a lot of nannies are still paid partly on the books and partly cash in hand.

SueW Sun 06-Jul-08 12:12:53

Nick I meant they will try to get it on the cheap so "We'll pay you £20k a year gross through the books and then we'll give you £50 quid a week 'pocket money' or 'expenses'"

Do you see? Like when people say to a builder - How much for cash? - they mean 'Drop the VAT cos I know you won't put it through the books'.

imananny Sun 06-Jul-08 13:28:40

employers try it on with the cash thing , as there are lots of people who will accept cash/or some cash in hand

yes nannies seem to be the only job that mainly talk about nett rather than gross, but dont think that is the only reason why employers do it on the cheap

janett - more fool them, and hope you said firmly NO!!!

imananny Sun 06-Jul-08 13:29:36

sue - builders and other professionals can do that ( though they shouldnt) because they are se, and perm nannies CANT be se

janett Sun 06-Jul-08 22:34:23

thanks for all your comments. Yes the cash in hand was not going to be declared on pay slip. No doubt they will find some-one to work like this.

1dilemma Mon 07-Jul-08 01:24:17

I think it's a bit more complicated than that nannynick, but I live in London so my views are swayed buy that. It's something I find difficult as you know because I've posted on here about it.
Essentially I think nannies were used to saying eg £5/hr net and getting paid £7.50 (all amounts are guesses just read on) then a bunch of nannies came along and said OK I'll do it for £6/hr cash, there were generally less desirable nannies in one way or another (qualifications, language skills etc) so then the 'desirable' nannies upped their demands to £6 net so the less desirable upped theirs too.
End result is large wage inflation in nannies salaries (which there has been- making them out of the price range of lots of trad nanny employers) and lots of people mucking around/not understanding/being clear about tax/NI.
Personally I think the credit crunch/inflation will sort this out as it will make nannies even less affordable and make it even less desirable to work for cash.
I could be completely wrong

(edit I mean to imply nothing about less desirable nannies other than some people want qualifications etc)

AtheneNoctua Mon 07-Jul-08 10:45:52

I think the credit crunch will find more nannies -- now fewer -- working for cih. AS people are laid off from their work, they will in turn let the nannies go. The market will have more nannies than vacancies, and nannies will have to settle for cash in hand because that is what is being offered. Also because employers will feeling the pinch and looking for ways to avoid taxes.

Im not condoning the practice. Just saying that as people feel the pinch they will be more willing to take the risk of a 3k fine for immediate financial gain.

I also nanny wages are due to drop for the same reasons.

AtheneNoctua Mon 07-Jul-08 10:46:00

I think the credit crunch will find more nannies -- not fewer -- working for cih. AS people are laid off from their work, they will in turn let the nannies go. The market will have more nannies than vacancies, and nannies will have to settle for cash in hand because that is what is being offered. Also because employers will feeling the pinch and looking for ways to avoid taxes.

Im not condoning the practice. Just saying that as people feel the pinch they will be more willing to take the risk of a 3k fine for immediate financial gain.

I also nanny wages are due to drop for the same reasons.

AtheneNoctua Mon 07-Jul-08 10:46:42

I hate when that happens!

justaphase Mon 07-Jul-08 10:56:26

The double taxation thing is the key to it I think. And it is not fair to compare to paying VAT because we pay VAT on pretty much anything we buy. Very different situation with paying employee wages.

Every other employer is allowed to tax deduct their employees' wages. Except nanny employers. If the government changed this it would largely solve the problem. And I suspect maximise tax revenues as well.

Bink Mon 07-Jul-08 11:00:30

I've read exactly the opposite prediction, AN: that because of credit crunch, families who were managing on one income may now decide they need two -> both parents working -> more nannies needed -> shortage of nannies -> wages due to go up!

It'll be interesting to see which way it does go.

AtheneNoctua Mon 07-Jul-08 11:05:01

Nooooooo, Bink! Say it isn't so. I can't afford for the wages to go up.

Seriously, I'm sure whoever wrote the article was more qualified to speak on the subject than I am. But... I do think there is a tendancy to slant article to the horrirs of the credit crunch these days. So, I'll keep positive about the possibility of salries sliding (along with everyone else'salaries) until I see edidence to the contrary.

I'll be looking for a new live-in shortly. So I guess I'll find out soon enough.

justaphase Mon 07-Jul-08 11:15:31

Families decide they need an extra income so second parent goes out and gets a job?

Hahahahahaha!

And they spend the extra income on a nanny! Seriously?

Whoever came up with this argument is certainly on another planet!

My personal view - nanny jobs are cyclical because nannies are a luxury. So when the economy is in a recession nanny wages should go down.

I can argue the other side as well though - as the economy weakens some of the foreign nannies who came to seek their fortune in the UK may return home. This should lead to lower supply and support wages. I would not hold my breath though.

AtheneNoctua Mon 07-Jul-08 11:28:22

Nannies are luxury? I beg to differ. If you have two small children a live-in nanny is cheaper than a nursery or a childminder. And lots of people have jobs that include longer hours than nuseries or childminders are open.

For some people nannies are probably a luxury, but for many people they are the most cost effective childcare which allows them to keep their job.

justaphase Mon 07-Jul-08 11:49:27

I suspect that if you look at the income bracket of the people that employ a nanny you would agree. You need to earn c.£30K after tax to make it worth-while returning to work.... which is what? £45K gross? (my maths may be wrong but I think thats the ball park). How many SAHM can just go out and get this sort of job? Also, how many of these jobs are available with the economy going in a recession?

So while I completely agree with you that a nanny is a necessity for a couple earning £100K+ .... it is an unaffordable necessity for the majority of families .... thus making it a luxury.

AtheneNoctua Mon 07-Jul-08 11:56:06

I would say that being a SAHM in the first place is an unaffordable luxury for this nanny employer.

I have a hard time considering an expense which is incurred for the sole purpose of allowing my DH (or me) to go to work a luxury. The fact is a live-in nanny is the cheapest form of full time childcare for my little devils angels.

nannyL Mon 07-Jul-08 16:45:31

just to add my bit

many nannies are employed by people on top jobs with very high incomes (ok not all)

these are the same people not likely to be as effected as £100 here or there really does make as much difference as it would to normal people.

I cant imagine the NHS cutting the pay of their consultants or GPS....
90% of the nannies i know well work where at least one parenst is an extreamly highly paid Dr!

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now