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Nanny had taken a second job

(32 Posts)
Workingmamma32 Sun 11-Mar-18 20:19:22

Our nanny who works three days a week has just taken on a second job. We didn't think about the tax and NI implications of this until seeing her monthly payslip from the nanny tax agency we use and realising that we are now paying £58 extra a month because her tax code has changed. Apparently her second employer has opted to split the tax and NI between us therefore pushing up our monthly payments. This doesn't seem right to me - paying more tax and NI per month just so she can earn more money by working elsewhere. Do I have to pay this?

mamaryllis Sun 11-Mar-18 20:26:14

Eek. I think with nanny tax it depends on the contract you set up. From vague memory, if you stipulated her after-tax pay, and agreed a set after-tax amount, it might be up to you to pay the extra... if you agreed a gross income, then the deductions will come out of her pay, so she is effectively paying the extra tax, not you... but call nanny tax. I’d be changing my contract so that SHE paid her extra taxes, not passed them on to the employer to do so. It’s hard to think through the ramifications when you set nanny salary, esp for pt.

LittleBearPad Sun 11-Mar-18 20:27:57

Did you agree gross or net pay?

Bythebeach Sun 11-Mar-18 20:28:36

As above....this is why it’s really important to agree gross salary!!!

PlonkyPlink Sun 11-Mar-18 20:30:46

Agree with poster above. Nannies often agree a net salary rate per hour. When you write the contract, you need to convert that into a gross salary, or otherwise you end up in the situation you find yourself innow. Check the contract. I don’t know about the legalities of changing it now if you have agreed a net salary in writing.

Workingmamma32 Sun 11-Mar-18 20:36:04

We agree a net hourly rate of £10

Workingmamma32 Sun 11-Mar-18 20:43:44

I've checked the contract and there is nothing in there about getting another job or the tax and NI implications. It does say that the salary is £240 a week net

mamaryllis Sun 11-Mar-18 20:44:56

That’s your issue. It should have been a gross salary. A net salary means you are responsible for tax owing, not the nanny.

BellyBean Sun 11-Mar-18 20:45:31

This is why you should agree a gross salary. Nothing you can do.

childmindingmumof3 Sun 11-Mar-18 20:46:48

If you've agreed net then any tax increases, student loan repayments etc are your responsibility not hers. You could ask her not to split her tax code but it's her choice.

nannynick Mon 12-Mar-18 06:21:14

You would have been told that agreeing a net wage is unwise. If you used a nanny agency to recruit the nanny then I expect they also told you it would be unwise to agree a net salary for a part-time job.
All my nanny jobs for the past 12 years have been gross, there is a big movement to having gross wages as it helps parents to know their costs and now with pensions being on gross means you have employer contribution but deduct the nannies contribution from their gross salary.

I would renegotiate salary as soon as you possibly can, so that you have an agreed gross salary.

nannynick Mon 12-Mar-18 06:32:34

This sounds like it is also the nannies fault. They agreed net in your job AND in their new job, as if they had agreed gross in their new job they would not have needed to do a split as you are paying over £12k.

I have been educating nannies and parents about this topic for many years, yet some still agree Net wages.

On the plus side, personal tax allowance goes up in April, so you will benefit a little from that but it is offset by the pension amount also increasing.

Try to agree a gross salary which is based on 60% of tax allowance (which is reasonable for 3 full days per week). Then you will stop your costs going up too much.

RicStar Mon 12-Mar-18 06:46:26

I am hoping once pension contributions rise to a minimum 8% (employer 3, employee 5) it might finally kill off the nanny net wage agreement - as it is another significant variation - although it probably won't. It is annoying that the nanny payroll didn’t warn op of the downside of such an agreeement esp for a part time nanny. Hopefully op nanny will understand the need for change if op reaches out to them (and does not try to make nanny take all the tax cost) so op can get certainty going forward at least.

pigshavecurlytails Mon 12-Mar-18 08:19:38

I'm afraid you've been very very foolish agreeing a net pay. If she hasn't been with you long I would suggest you let her go and start again with a gross pay agreeement. Did your payroll company not advise you against a net pay agreement? who drew up the contract?

Lunde Mon 12-Mar-18 11:05:46

It sounds like you made a big mistake agreeing a net salary. Most people can't afford to live and pay rent etc on a 3 day/week job so would seek extra work.

Alwayscheerful Mon 12-Mar-18 12:46:39

It is possible stipulate in a contract that you must be the first employer.

MauriceTheSpaceCowboy Mon 12-Mar-18 12:49:54

Sorry but yes you are solely responsible for this extra cost.
Time to think about whether or not she’s worth the extra money.

Blondeshavemorefun Mon 12-Mar-18 21:48:47

Yep as others have said. You should have agreed a gross wage

This is both your faults. And the nanny tax company for not explaining it

What your nanny does on her days off is nothing to do with you. If she wants to work she can

Yes you will be stung for the tax as you discussed and put nett not gross

Viviennemary Mon 12-Mar-18 22:01:22

This seems so unfair if you've agreed her pay and now you are ending up paying more. The nanny agency should have alerted you to this. Just say you're not paying it end of. And if she wants to continue in your employment the pay will be the same as before. If she doesn't want to continue then she should resign. I blame the nanny agency.

user1487194234 Mon 12-Mar-18 22:02:57

She should resign
Why should she
If she did she would be claiming constructive dismissal

LittleBearPad Mon 12-Mar-18 23:57:29

This seems so unfair if you've agreed her pay and now you are ending up paying more. The nanny agency should have alerted you to this. Just say you're not paying it end of. And if she wants to continue in your employment the pay will be the same as before. If she doesn't want to continue then she should resign. I blame the nanny agency.

Yes they’ve agreed to pay her £240 net of tax. So that’s what they have to pay and if the tax goes up that’s their risk. The nanny agency should have advised a gross wage and I’m surprised they didn’t...
I would agree a gross wage asap OP and then you aren’t at risk of this happening again

Viviennemary Tue 13-Mar-18 00:05:00

But the tax has gone up because of the other money she is earning from the other job. I'd say they should pay the extra tax. OP had nothing to do with this change of circumstances so should continue as before. That's what I would do.

timeisnotaline Tue 13-Mar-18 00:07:27

That’s not helpful Vivienne as employers are actually required to keep to contracts!

Viviennemary Tue 13-Mar-18 00:10:41

Thus I'd say I agreed to pay you net of tax due on the wages I am paying you. What arrangements you make for any tax due on other money you earn has nothing to do with me.

InvisibleUnicorn Tue 13-Mar-18 00:14:37

Is she within two years of you employing her?

If so, just end the contract. You can do this with zero come back. Get a new contract based on gross pay and if she signs it, she stays.

There is zero (yes, I am simplifying this, there are exceptions in law) comeback within two years unless she is pregnant or disabled and can prove that was the reason for you dismissing her.

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