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Pensions- who pays?

(3 Posts)
Hels20 Tue 13-Feb-18 22:36:50

Hi everyone

We have employed a nanny for 5 years and are on our second one.

Last year I gave our nanny a 10% pay increase (she had been with us 2 years) and then decided to swallow all the cost of the pension contributions - so her net pay remained the same.

Now I have realised pension contributions are going up to 5%. What is expected? What is everyone doing? Is it expected that employees pay all of the 5% or is it ok to split it 3% and 2%?. Next year - I think contributions are going up to 7%.

I think we are pretty good with pay - we live in London and I think we have always been pretty generous (we pay two bonuses a year too). Our nanny is amazing but as our pay has been frozen for 3 years, the cost of a nanny is being very expensive!!

Thanks all.

Hels20 Tue 13-Feb-18 22:37:43

Sorry - should say “is it expected that employers pay all the 5%?

nannynick Wed 14-Feb-18 09:37:06

A lot of employers are changing to a gross pay agreement. This helps them by fixing their costs as much as possible. It also helps their nanny as they get any increase in personal tax allowance, any rebate of overpaid taxes (which can happen for those with multiple jobs).

Under a gross agreement, you pay the employer pension contribution (2% minimum in April 2018, 3% minimum in April 2019). You deduct the nannies pension contribution (minimum 3% April 2018, minimum 5% April 2019) from their gross pay, which reduces their take home pay.

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