Nanny net/gross pay nightmare - help me navigate this!

It's the agencies and employers who advertise net wages. The balance of power is with the employer, not the employee. If a nanny has a net pay arrangement it is the fault of the employer, it's that simple.

Fair point, but even mentioning 'net pay' still sets in train the 'oh, if he/she just wants net pay then maybe I will pay her cash' train of thought....

As a nanny I can tell you it has little to do with feeling like we are immune to personal taxation. It's about finding employers who are willing to pay tax in part/at all. I have been asked in more job interviews than I care to remember if I was ok with employers only paying part/no tax on my wage. They ask the agencies the same questions too. It is not us that see the benefit from avoidance. Sadly it does make it harder for those who do pay.
It does always impress me how diligent nanny employers are on here, sadly not always the case.

I have read a lot of these threads over the years and it amazes me that some nannies seem to feel that they are the only group of working people that is immune to personal taxation...

£13 gross sounds about right for £10nett if working a 5 day week

Are you happy to pay £13 gross

Where if just a 2 day nanny would be more like £12 gross /10 nett

Sorry wilding saw you had double posted - many of my nannies also discuss nett

No you are not at fault. £13ph gross sounds like a lot to me and if it were the nannies only job, they would get more take home pay than they are wanting.

Don't think there is anything more you can do. You have decided upon the salary and offered the job based on that salary. Nanny needs to decide if they want to take the job, or not. You may lose the nanny and need to recruit someone else. However I hope they will see that your offer is good.

This may help explain things to the nanny
Tax year runs 6th April to 5th April, so earnings throughout the entire tax year are taken into account. Income tax is calculated on the total income during the tax year. So the personal allowance gets used up and the remaining amount is taxed, at 20% for up to £31,865, then it changes to 40% Tax Bands 2014/15

MtnBikeChick - I think your job would be paying her around £25,000 a year. So adding another job on could mean that total earnings in a year does go into the 40% tax bracket. It depends how much the salary in the other job is but there is less than £7000 before hitting the next tax bracket. Does the nanny realise that the more she earns, the more she will be taxed. Whilst the 40% tax only applies to the salary over £31,865 it may be a surprise to her that her income is that much and will be taxed more as a result.

You are quite right to agree a Gross salary. What figure to agree is tricky if the nanny wants a certain take home pay.

For the past 10 years of nannying I have had Gross in contracts.
When I was a college student (so age 16+) my first real job (retail) the contract was Gross. I am not sure where the Net pay thing happened with nannies. Back in early 1900's nannies were predominately live-in, so pay then may well have been Net. At some point, daily nannies became more popular and maybe at that point the pay did not change, when perhaps it should have done so. Personally I feel some nanny agencies keep up the Net pay thing, not sure why. Some agencies often advertise Gross salary but some always do Net. If nannies go to an agency and the agency says the job pay x amount Net, then no wonder nannies keep asking for net pay. Agencies need to change, then more nannies will in my opinion.

50/50 split on tax code could work, nanny would need to request it by contacting HMRC and they might not agree to do it. Problem is that for a period of time you will be the sole employer.

MtnBikeChick - What is the gross pay per week you have currently agreed?

Looks to me that BR coding works out at 532 a week (14 per hour)
500L coding works out at 505 a week (13.25 per hour)
1000L coding works out at 475 a week (12.51 per hour)
So when deciding what gross pay figure to offer, which do you choose?
You could argue that you could hire a different nanny who would do 38 hours and no other work and thus you would be paying them £475 gross per week.
Why should you pay more? The nanny wanting a certain take home pay figure results in you paying more money.

Work it out with a 500L tax code, that is assuming a 50:50 split of tax free allowance between you and her other family. For my nanny that works out as 12.08 gross per hour but it depends how many hours. Then tell her that is what you've done and put that amount gross in the contract. She can ring HMRC to formally split the tax code if she wants to (but you can't do that on her behalf).

Sorry blondes, phone reposted something from hours ago! I'm a nanny on a gross contract too but all the other nannies I know, and all the agency jobs, seem to be net so I assumed that was the norm...

wilding they are not!!! My contract says i earn £xxx gross a week

'bangs head'

I think you are wrong. You agreed to pay £10ph net and it's your problem to figure out how much tax you need to pay on that. It's not surprising that your nanny is unhappy that she is not getting the deal you agreed.

Sorry did I just post that again? Phone going haywire! Certainly sounds like trying to organise a gross salary would be a lot less faff all round but as someone said upthread, difficult to change mindsets if she's used to doing it the other way. (I'm a nanny on a gross rate, just fyi!)

I had a nanny for four years

Contract and discussions re pay were always gross

Why would she expect a net figure?

Nanny contracts are always based on net pay though, it's not unreasonable for her to want that from you. Your nanny tax company should be sorting out all the amounts etc though, that's what they're for!

To get 380 a week at least into her account the only thing I can think of is to calculate gross using BR taxcode.

Have you been issued a taxcode to use? Maybe you could change the gross figure everytime you get a tax coding notice.

Problem is you want to know how much it will cost you, which is why you agree a gross salary.

No other jobs do net pay, do they? So why do people still expect net pay agreements?

Another nanny here who agrees Gross pay agreement only. Her tax is not your responsibility.
I have two nanny jobs and am paying 20 percent tax on second job. But will claim back at the end if the year some of this; as all my allowance is not used on first job. I could split tax code but will not do this unless I know second job is permanent.
Your nanny will have to accept that her tax is her responsibility. I would advice you to pay the same gross rate as her first job.

Nannies certainly don't always have nett in contract. I have gross. I have done for years

You need to work out how much you can afford gross whether £12ph or more and this to be the amount you offer To your nanny

I must admit I've never employed a nanny but I have worked as a tax advisor. If you're agreeing a net pay arrangement then what happens if tax or NI rates go up ? You just take the hit so she can receive the same ? That's barking mad ? How about another scenario.? Say nanny has other income which is taxed via her code such bank interest or dividends, or say has an underpayment of tax for a prior year which is also collected via her code. That means you would effectively be paying her tax bill on income that hasn't come from you ! Why would you agree to that ?
I can't think of any other industry where the employer agrees to pay a set net salary.
Like others have said - agree a gross basis and that's it.

It's a big problem with both nannies and employers. What other job would employers advertise and offer net pay?! None.

Could you send her the links I've put above. A gross agreement will benefit her as well.

If she can't be convinced/educated I'd find a new nanny.

You're the employer, you tell her it's £12 gross and like everybody else she has to pay tax on that £12 gross and whether she gets £380 or not is not your problem.

I say this as a nanny!