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After school nanny paye

(14 Posts)
Geneticsbunny Fri 27-Oct-17 15:17:58

We are about to employ an after school nanny on a term time only contract. I was planning to use a standard contract from online and offer a weeks paid holiday in term time and two weeks sick pay? The earnings are only £120 a week gross so there won't be any tax or pensions to work out (I think?) so who do I get to do payroll? Or can I just keep a record myself? And do I need to do anything else apart from employer liability insurance? We are First time employers so all advice great fully received.

LillyLollyLandy Fri 27-Oct-17 15:22:21

You need to register with HMRC and a payroll needs to be run.

https://www.gov.uk/paye-for-employers/setting-up-payroll

You also need to comply with the pension regulations even if the nanny doesn’t earn enough to be included in autoenrolment. There are reporting obligations that need to be met.

http://www.thepensionsregulator.gov.uk/en/employers/new-employers/no-pension/outcome.aspx

LillyLollyLandy Fri 27-Oct-17 15:22:43

You can of course outsource the payroll to a company like nannytax.

Geneticsbunny Fri 27-Oct-17 15:38:17

Great. Thanks. So if we set if all up through a payroll place like nanny tax they will make sure we have everything covered right?

AlexanderHamilton Fri 27-Oct-17 15:56:09

You have to offer 5.6 weeks paid holiday but you can specify whether it's term time or not.

You may not have to register as an employer with HMRC but only if your nanny has no other job AND earns less than £221 per week.

nannynick Fri 27-Oct-17 17:47:57

Nanny contract which can be adapted: www.nannyjob.co.uk/information/employment_contracts

For term time only you need to be careful with calculating holiday entitlement. You will need to work it out based on the exact dates involved but here is the basic maths:

Hours worked per year / 100 = 1% of holiday entitlement. Statutory minimum holiday is 12.07% of time worked, so multiply by 12.07

You will be paying under £5000 in total, so no auto-enrolment pension. Your nanny can though choose to opt in to a pension scheme so you have to have one in place. You can use NEST Pensions or Smart Pensions... both of those do not charge the employer. Initially you will need to do a declaration of compliance with the pensions regulator.

Your nanny is likely to have other income, not many people can survive on under £5k a year. So you will need to do payroll... you could use software like BrightPay but do you really want to learn how to use it? You could use PAYE Basic Tools from HMRC but they are planning to discontinue that.

You can contract out the payroll to a nanny payroll provider - you may prefer NannyTax and NannyPaye are the largest providers. They will charge an admin fee of around £200 a year. So probably less than 5% of the salary you are paying your nanny. Increasing your cost by 5% to not have the hassle of producing payslips and having to deal with HMRC (make sure you return all forms the payroll provider sends you as they are needed to stop HMRC contacting you with queries) could be worth it to you. What is probably more worth it to you is that you have someone to talk to about any issues that may come up... nanny payroll providers are used to having lots of questions asked by parents employing a nanny and they don't all involve payroll. Often they do as they are about things like nanny being off sick, nanny being pregnant, nanny not turning up to work, nanny wanting time off, but they can also be about things like should I get my nanny a birthday present, should they get a Christmas bonus, how do I tell my nanny that they need to do x, y, z better?

Some payroll companies will let you do your own contract or pay them extra to write the contract... others will write it for you included in their fee. You can use the contract at NannyJob with some modifications, so you could save a bit of money there (they also have a payroll service: NannyJob Payroll). Payroll providers currently charge extra for doing the pension administration but you may not need that if your nanny does not decide they want to voluntarily opt in as they will not earn enough to be automatically enrolled.

If you decide you want to use a nanny payroll company, do call a couple of them. Think about some questions you want answers to and see what information you can get out of them for free on a phone call. Talk about calculating holiday entitlement for example. Talk about how to do expenses, in particular travel - would your nanny use their own car to pick your children up from school? Would your nanny take children to any after-school activities/clubs? Talk about pensions and what they would do for you and the cost, given that your nanny would not need to be auto-enrolled.

Geneticsbunny Fri 27-Oct-17 19:23:28

Wow. Thank you so much nannynick. A very comprehensive answer.

Geneticsbunny Fri 27-Oct-17 19:32:08

It works out as about 5 weeks holiday I think which seems a lot. We are going to really struggle to cover 5 weeks a year in term time. Any suggestions?

Geneticsbunny Fri 27-Oct-17 19:33:31

Do we pay for a few of the school holiday weeks and ask her to take it then?

AlexanderHamilton Fri 27-Oct-17 19:47:46

I used to employ after school activity staff on a term time only contract. They had to take all their holiday during school holidays.

Geneticsbunny Fri 27-Oct-17 20:02:19

Alexander did you give them any paid holidays?

AlexanderHamilton Fri 27-Oct-17 20:23:08

Yes. I worked out how much holiday they accrued using the government website & paid it at the end of every term.

nannynick Fri 27-Oct-17 21:31:58

Your nanny does not take holiday in term time. That is a condition in their contract.

If they worked 38 weeks you would pay them for around 43 weeks. So they take the holiday during times they are not working such as during half term and during other holiday times.

Geneticsbunny Sat 28-Oct-17 09:17:27

Great. Thanks for clearing that up

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