Help! Minefield of financial bits of hiring a nanny

[pecanpie]

I'm just investigating a nanny to look after my 2 children when I go back to work. I want to make sure that I'm doing everything by the book, so I've been looking into how much tax and national insurance would come out of the salary I am able to offer.

This might sound like a stupid question, but how would I go about paying a nanny and deducting all of the tax and NI and making sure it goes to the right place?

Also, what happens if a nanny becomes pregnant herself? Is the employer always in a position to have to pay SMP? I can't afford to pay SMP and hire a second nanny - I'd effectively be working for nothing myself - or am I missing something here about who pays SMP?

Please help!
Thanks!

Re smp you claim it back from
Hmrc so you don't pay twice.

Re deduction of nic etc you hold it Back and then pay it quarterly to hmrc(all very easy as
They give you a reference and you pay to one of their accounts). I use an agency to calculate pay amounts and do payslips (£200 pa is money well spent and I am an accountant) but you can do it yourself using hmrc guidance packs that show you what to pay how to work it out and how to file .

Brilliant thanks poppy34!

calculator.kistax.com will give you an idea as to how much Employers NI would be.
Keep in mind that Income Tax and Employee NI is deducted from nannies Gross pay on your nannies behalf. You send it quarterly to HMRC. So agree a Gross salary.
Payroll companies can do the figures for you and remind you when to pay HMRC. Payroll companies charge from around £120 a year upwards.

When thinking about finances, consider extra costs above the nannies salary. For example the weekly activities budget, nannies on-duty travel costs, extra household related costs (heating, lighting, wear & tear, food).