To think nannies quoting net pay is ridiculous

[Tryingtobenice]

I don't know other careers which do this.

It is wrong because
a) it sounds like tax and NI are nice optional extras for the employer not a legal requirement
B) it makes the pay sound so much less than it is. The average nanny salary in London as far as i can tell is £30k per year, which is more than a teacher starting salary in London.

I am always coscious at work how much someone is paying for my effort, and I am aware of it as the actual cost. A nanny should be conscious that their employer pays £14/hour for their help, not £10/ hour.

It shouldn't make a difference to the quality of care or anything but may help improve the perceived status of the role.

I really just don't get it, as the nannies seem to be the ones perpetuating this. It's not like the employer actually thinks the nanny is cheaper than they are, since it's their bank account the full cost leaves each month!

Sorry, just re-read and that came across quite shitty. I didn't mean it to.
Part of the issue is that nannies aren't always seen as having a "proper job" & that bugs the crap out of me. When a nanny quotes net pay, it does nothing to help the way nannies are looked at.

It's fine to ask a salary expectation, but I think it's far better to offer a salary range - eg where most ads say £8-£10 per hour, yours should say £10-14ph gross. Eg if u have a nanny apply who's newly qualified of new to nannying, then you can offer a lower salary, but if u have a highly recommended - ticks all the boxes nanny apply then offer her the higher salary. Hope that makes sense!!

If you want to pay £30k then write back to the candidates you like saying x hours a week, x duties, £30k gross annual salary which is roughly equivalent to £440 a week net if you are on a standard tax code.

You might want to make a note to them that if they are on a different tax code (BR for eg) or have student loan repayments, then the net figure will change.

I would actually put gross annual/gross weekly (and maybe an indication of typical net weekly) in your ad, and then no one will apply if their expectations are way off yours. Also, I know lots of nannies, especially the more experienced/savvy ones, won't bother replying to ads that don't indicate pay as it is a waste of everyone's time if you then find they are only willing to pay much less than you want.

A salary range of £x-£x depending on qualifications and experience is sensible if you don't have fixed ideas on who you want (if you are just advertising for "a nanny" rather than "a level 3 qualified, Ofsted registered nanny with 5 years experience").

I can sympathise with nannies asking for net. In order to negotiate on gross figures, they'd need to understand our ridiculously complicated tax system.

Why the F does there need to be PAYE, AND employee's NI, AND employer's NI? Fucking shite system just trying to make the rate look lower than it really is. Tossers.

How does income tax and NI make the rate (what rate?) look lower?

Negotiating on the gross figure is surely simpler, as it is the total amount paid. Negotiating on the net amount is more complex as it is just part of the amount, and what is deducted differs from person to person. To negotiate on net you need to understand the tax system as you need to know what is left over after tax.

What is the basic rate of tax? Most people would answer 20%.

It isn't. Factor in national insurance (both types), and the basic rate of tax 40.25%.

Why would an employee factor in employer's NI?

Mrs Bethel no its not! Can I ask where you got that figure from please?

Some nannies do, sam as a 'this is what it will cost you overall' figure. I see why they do - they want families to be fully aware of tge ginamcial responsibility having a nanny brings. It shouldn't, however, figure anywhere in the contract or ad.

The rise of the graduate nanny makes student loads a real consideration and there are fewer and fewer FT, 1 family jobs out there. Negotiating net is incredibly complicated.

Other countries have simpler systems (usually because there isn't PAYE) which makes net possible. The UK doesn't.

SamSmalaidh, MissKeithLemon

Employer's NI is just a ruse to hide from people the tax they are really paying.

For each extra £1 of pay on a basic salary:
PAYE basic rate: 20p
Employee's NI basic: 12p
Net pay: 68p
Employers' NI: 13.8p

So it costs the employer 113.8p to give you 68p.
=> you get 68/113.8 = 59.75% of the wage expenditure
=> the tax rate is 40.25%

Just out of interest - is the gross / net salary inclusive of the various 'perks' such as accommodation, free use of hot water, heating, laundry, use of a family car and subsidised food etc?

MrsBethel: Employers NI doesn't come out of the nannies wage though, so whilst your calculation may be correct with regards to what employers need to factor in, tying it into an equation with the nannies pay is confusing. They need to factor that after they've worked out nanny's net and gross (and NI/tax contributions from her wage) before considering that bit.

Though it's an interesting way of putting it!

pendeen live in salaries are usually lower than live out to reflect those costs, yes.

UndeadPixie, the system is intentionally designed to be confusing, so people don't realise how much tax they are paying.

If I were a nanny, especially if I were a recent arrival in the UK, my attitude would be "fuck your stupid system, just give my the right amount of money, the rest is between you and your pathetic government".

The nanny isn't paying the employer's NI though.

A nanny earning £500 a week pays £69 in income tax and £42 in NI.
An employer paying £500 a week pays £49 in employer's NI.

If they agree a gross wage, then it is clear to the nanny how much tax she pays from her payslip. It is clear to the employer what their NI is.

I don't see how that can possibly be more confusing than agreeing net and then trying to work out exactly what everyone's tax, NI, student loan payments etc should be on top of that.

MrsBethal: Fair point. I think many nannies and employers have that attitude though wrt a nanny's pay

MrsBethal - the figures you give do not take into account that NI only kicks in at the earnings thresholds (just under £150 pw atm) or that each person receives a basic personal allowance of tax free pay (just over £150pw atm) or that NI reduces to 2% at the upper earnings threshold.

Yes - the system appears complicated to some; but to over simplify and come up with notional tax rates at the figures you quoted earlier is silly.

Tax rate is not 40.25%, notionally or otherwise. Thats complete rubbish.

ER's is a tax on employers and cannot be included in any of those workings out. To do so is misleading. It affects an employee not one bit.

I could quite easily provide figure to show a tax rate of 0% by using your reckoning, simply by quoting a salary of £8000 per year

I doubt that those arriving from outside the UK would think -

"fuck your stupid system, just give my the right amount of money, the rest is between you and your pathetic government".

In the UK wages are quoted in gross terms (as eveywhere else in the world also does) but paid as net. The work involved in filing tax returns etc is done for them.

I think more of them would breath a sigh of relief as they do not have to stand in a long queue once a year to pay their taxes (if they have kept anough back to actually pay the bill to start with)