69% of nannies still have a Net pay contract - how can we change this?

Hmm, they don't seem to have changed the dates for introduction so for employers with fewer than 50 employees, the earliest that they will be required to operate the scheme will be March 2014. The minimum employer contributions will remain at 1% until September 2016.

It begins in October 2012, but the arrangements for phasing it in are quite complicated. The Pensions Regulator has just issued an updated information leaflet but the detail is contained within a Pensions Bill which is currently before the House of Lords. Expect to see more information once it becomes law, I will try and get something together soonish

oh god when is that starting?
must sack the nanny before that

(Joking)

Compulsory pensions - great question!

The (minimum) pension payments will be based on gross pay, but any payroll that currently handles the net-to-gross calculation can just incorporate the pension calculation in the same way so the arithmetical part is fairly simple.

But if someone on a net salary does not opt out of compulsory pension provision, depending on the wording of their contract their employer could have to pay both the compulsory employer's contribution (which rises to 3% of the gross salary), but also the employee's contribution which rises to 4% - and national insurance on top!

I think the net pay thing is much more common in London - certainly in Bristol you only ever see jobs advertised as gross and wages discussed in gross.

Random related question: how will all this work once pensions provision has to be made?

Presumably it would be administratively simpler when paying gross, or would it not be that different either way?

Been a bit busy recently and for the next couple of weeks I think so no promises but...

I do need to update the tax calculator for 2011/12 - putting 747L will calculate basic rate tax correctly but NI needs changing as well as the higher tax rate.

Yea, I'll do a table :)

As to the law... tax and national insurance are calculated by reference to a gross salary, so if a contract quotes (only) a net salary, each pay day a calculation has to be performed to work out what gross salary will result in the right amount of deductions to leave the desired amount of net salary.

Every employee must be given a payslip on or before payday which states the amount of gross pay that week/month, the nature (tax, ni etc.) and amount of any deductions, and the resulting amount of net pay actually received (and if that pay is paid in more than one way, e.g part by vouchers, the amount of each payment).

That's about it for the law.

Do I think there should be a law attempting to prevent people from entering into contracts for net pay? No, I don't. Do I think that there should be a code of practice followed by nanny agencies that says that they will advertise gross salaries unless there is a good reason not to? Yes I do, but so many nanny agencies are not members of any professional body (such as the Recruitment & Employment Confederation) and don't sign up to even a very basic code of practice that I am afraid this wouldn't actually change very much.

I have always worked in gross and will do to interveiws that offer net wages with a gross figure in mind. I also tell agencies i work in gross. and really think they should start educating the nannies on their books who don't understand.
With the internet and tax calcultors its really not that difficult!

I don't deal with agencies that quote in net, but that means that I can't use any of them... Once I quoted a gross salary to an agency (I stressed it was gross) and they told the candidate it was net, and much unhappiness ensued. I have found that generally agencies and nannies don't want to know about tax and expect me to explain it to them (so I have to be a tax consultant as well as the employer...)

What net pay is depends partly on your tax code and on your total income since April, including other jobs, which, as a part time employer, I may not know about. eg if the job is nanny's second job, then it is automatically taxed at 20%. That's a lot more tax than if you use the £6470 (or whatever) allowance. So, even giving an "approximate" net figure is difficult because I may be out by 20% (...and yes I know this is simplified).

If nannies want to be employed legitimately and have their tax paid, they should not just say "I don't know anything about tax" and leave the work to the potential employer, they should educate themselves and help the employers figure it out.

We've always hired our nannies on the basis of a gross salary, but I've always had to work backwards from a net salary quoted by the nannies to get to that figure. It's all a bit a mystery to me how then when I put the (annual) gross pay in the contract, it get signed, as presumably it is not a familiar figure ?
To be honest all the rest of the workforce gets a gross annual salary and we all work it out by ourselves how much this will mean in net, nannies shouldn't be any different ?

In my experience nannies ASK for their pay in net terms. It means they lose out from tax benefits but gain from higher taxes which, lets face it, we've had more of than reductions in the last 12 years I've been employing nannies...

Apropros of nothing, I've just increased my nanny's salary to reflect the outrageous cost of fuel...

'Hope you are not saying that you are a bit thick and thus need things to be made simple for you? Other jobs are not advertised as Net, so why should nannying?'

Yep. That's exactly what I'm saying . Maybe all jobs should be advertised as net?

'it wouldn't be the figure someone actually got... just an indication if there taxcode was the most typical.'

That's good enough for me...and it should be 'their' not 'there'

Ooop north I always see gross pay so as such have always been paid gross, but I have lately been seeing net pay being advertised. I would also agree a gross wage.

'I don't understand why a nanny would be'

erm....for all the reasons listed above?!

I agree with the gross pay in contracts thing, but tbh I like jobs being advertised as net and I like thinking about my salary in net terms. It's easier on my brain and I don't begrudge paying my NI/taxes as much!

Maybe a net and gross figure could be given by nanny agencies/job ads?

I nannied for man years and never once was I told the gross pay. I don't understand why a nanny would be.

i have only ever accepted gross in my contract... for the past 10 years.

really had to argue it with one family, who said "nannies are always paid in net" but i stood my ground too and was paid gross.

i blame the agencies - many advertise jobs in nett

It won't change until a law is passed making it illegal to quote anything other than the gross salary for any employment.

It's so obviously pandering to domestic employers who pay cash in hand ie "This is what you can pay your employee if you're prepare to break the law; as opposed to this much larger amount if you insist on being legit".

A law change would remove a lot of the incentive to do this, as the amount saved would be reduced to the amount of employers' NI.