To pay my nanny what she asks for?

[Romax]

Because I think I may be but not sure as this is my first nanny.

I’m a single mother, two children under 10. I work part time. My nanny does 5 hours in total a week.

She is wonderful. 6 months now and my children love her, as do I.

She asked for £8.50 an hour. I didn’t give it any thought and this is what I have been paying. £42.50 a week. Cash. It is her only job (she has children) and seems to suit her very well.

However, it dawned on me this morning that I am only paying her 30p an hour more than minimum wage.

Do I wait for her to raise her prices (although I suspect that that may never happen) or should I suggest an increase now?. If so, what to?

I organise my budget down to the last penny, so I can see that I could afford to pay her more. I would simply reduce monthly savings, but I put away quite a healthy amount a month so I’m not perturbed by that prospect.

It’s just whether you pay what is asked for, if you think their value is more, you offer to pay more?

Many thanks for any advice / view

If she's cash in hand then that pay rate probably ok. But you are both risking HMRC investigation. I very much doubt she'd meet IR35 criteria as a self employed contractor either. I'm not making any moral judgments at all but it needs to be understood that there is a small risk here- even more so if she is claiming any income related benefit and not declaring this income.

If you do employ her then at £8.50 you are breaching minimum wage regulations. The basic NMW is £8.21 but as an employer you have to pay holiday pay and employers NI on top - this works out around £9.50- plus a pension (I think there's a waiver for small employers)

If you do employ her then at £8.50 you are breaching minimum wage regulations. The basic NMW is £8.21 but as an employer you have to pay holiday pay and employers NI on top - this works out around £9.50- plus a pension (I think there's a waiver for small employers)

No she isn't. For one thins employer pension and NI contributions don't form part of an emplyees pay rate anyway but as you have said NMW is £8.21. With a payrate of £8.50 she will be earning £42.50 per week. This is WELL under the Lower Earning Level for National Insurance which is £118.00 per week. (the same as the qualifying earnings for auto enrolment) The earnings trigger for auto enrolment is £192.00 per week.

The most the OP HAS to do by law is to get the nanny to fill in a New Starter Declaration (so she can be sure she has no other employment) and to keep a record of payments in case anyone asks at a later date.

ReL: Holiday Pay: Yes, technically she should be paid holiday pay. Assuming she isn't term time only then over the course of a full year she will be entitled to 28 hours holiday pay.

(If she is term time only then she will accrue 37 minutes holiday for every 5 hour week she works.)

One hour per day to pick up from school, make dinner and oversee homework? That’s a lot to cram into an hour

One more thing I just remembered.

As of 6th April you need to provide her with an itemised payslip. As no deductions are being made this can be quite simple, you can print it yourslef. You just need to state 5 hours @ £8.50 and the total paid.

One hour per day to pick up from school, make dinner and oversee homework? That’s a lot to cram into an hour

The OP said that she works 2 days per week so that would be 2.5 hours per day.

Has she got a Sister? :)

@Comefromaway

Really genuinely helpful
Thank you

Might be worth keeping a note of these websites then you can keep check on your calculations should any circumstances change

www.gov.uk/calculate-your-holiday-entitlement

www.thepensionsregulator.gov.uk/en/employers

www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions

Legally she could be an emplyee or she could be a worker. I couldn't comment. I do think her pay rate is low for sole responsibility even if it is a couple of hours per week but I see you are addressing that.

I would round it up to 50 at least.