Someone please help with this nanny tax ?

[whyismysoullost]

Hello,

I have never posted about this before so I'm not sure if this is the right place to put it.

I have just found a nanny, through an agency, after months and months of searching. However, the nanny is asking for a net pay of £14.00 and the nanny company are currently writing a contract.

I really do not mind pay a net of £14.00 as I've saved up quite a bit of money since it's been nearly 6 months since we could find anyone. But how much would the hourly gross pay be if it's £14.00 net ?

I'm also looking for a payroll company. Looking at past searches, a lot of people are recommending PAYEfornannies... but they are charging £240.00 one off subscription year which includes, contracts, HMRC, payslips... they have less downgraded packages.... can anyone suggest any other good pay roll companies that charge a bit less ?

DON'T DO IT.

If you pay "net" there are factors outside your control which may mean you end up paying hugely more.

Such as the PAYE tax code - if she had another job or other income, you could be allocated a very low tax code meaning more tax deducted and you end up having to pay more, just because of her other income.

Likewise if she's liable to student loans or wants to join your workplace pension scheme. You have to increase her gross so such deductions come out before she gets her net pay, which is a circular calculation as you end up having to pay even more as there's more tax on the higher gross to pay the student loan and workplace pension, and so it goes on.

If you really have to do it, make sure you get a cast-iron contract of employment saying that if SHE wants to join your pension scheme, it comes out of her net, and that if she is on anything other than the normal personal tax allowance (PAYE code), it comes out of her net, and student loans repayments also come out of her net. You should just offer her the net based on the normal personal tax code assuming no other deductions at all - all other deductions DO come off her net.

If she won't agree to that contract of employment, then walk away.

Never understood why nannies seem to feel entitled to specific net pay when the rest of us agree contacts at the gross pay level.

Just search for a net to gross salary calculator. You will need to know how many hours you are paying her in order to work out how much you will be paying her a month/week/year.

But be aware that the net to gross salary calculators assume that the nanny has one job or that you are the primary job that gets all the tax free allowance. If she has another job, be very careful because you could end up paying more tax.

We used NannyPaye who were good but this was a good 7 years ago now. Not sure how they compare cost wise.

I'm even more confused. So what do I do ? Agree to gross (that's fine). But is the net too high ? Am I thinking that if she wants £14.00 net- the gross would be around £17.00 an hour ?

It's going to depend - how many hours does she do? Does she have another job? Does she have student loans? What pension contribution is she making?

I really don’t understand why nannies have traditionally agreed a net salary. But as others have said, don’t do it. Agree an equivalent gross salary with her. I know it’s hard when you’ve been looking for so long, but it could end up costing you a lot more.

She's going to be doing 12 hours. I know, not a lot of hours that's why it took so long for me to find someone.

12 hours only means she has other jobs.

Isn't this sort of stuff what the payroll agency is supposed to help you with, being experts in the unusual way that nannies get paid?

But Users advice looks like it's worth taking notice of.

There was a thread with the exact same issue yesterday!

Don’t do it!

I'm still confused. I don't know what to do. Should I lower the net pay ?

No, you should forget her net pay, it's not your concern. Offer a gross amount based on what you afford, market rate and the nanny's qualifications and experience.

If you think £17 an hour is reasonable then offer that.

As others have said, I would agree pay in gross not net terms.

I currently use PAYE for Nannies and have been happy with them, although it cost me quite a lot less than you’ve been quoted (~£160 for the year I think). However I do handle all the pensions admin stuff myself, as I decided it was simple enough, so they just do payroll for me and drafted the initial contract.

PAYEfornannies is roughly £168.00 without pension but how do I do the pension side myself ?

The nanny agreed to a gross amount of 14.50- that way she still gets the equivalent to the net pay as this would be her first job.