Nanny said yes to job...

[lamandler]

And we are really pleased (if a little nervous!) as she is our first nanny. She seems lovely and has a glowing recommendation from her current employer. She will be working for them two days a week, and us for three.

I need to work out a contract and make sure I have covered everything re tax, ofsted, paperwork - just wanted a bit of advice from those who have been there to make sure I don't leave anything out.

Any tips for a newbie?

Although you mention Tax already, I'll still remind you to AGREE A GROSS SALARY.

As it is two separate jobs, you don't need to get involved at all with the other family. However your nanny does need to juggle things a bit, such as when they take holiday. If they want to go away for a week, they have to ask two different employers for the time off and hope both say yes. So consider how you will handle holiday requests, will you restrict when holiday can be taken or not.

I prefer a hands-off boss, someone who just lets me get on with it. Consider how much day-to-day involvement you want. I know a nanny whose boss is constantly (like every 30 minutes) asking how the child is, what they are doing - although their nanny already told them where they were going, what they were doing. They aren't a new nanny, they have been in the job around 18 months. If my boss did that, it would drive me potty! Try to trust your nanny - it will be hard initially but you need to let go a bit. By all means have your nanny send you photos, text messages, or do a daily diary to keep you in the loop of what is happening.

Not sure what sort of tips you want... guess others may feel similar as no one has replied to your post over the past 12 hours.

Instead of tips, how about asking us some specific questions about anything you are unsure about?

Ok nannynick, you have just made me realise that even if I could afford it, I should not have a nanny - I would be that mother . I just miss him so much when I'm not with him. Dh is on holiday now home with him and I'm sure he gets annoyed with my frequent check ins. But I can't help it!

OP the holiday point is a good one. Can you be flexible on holidays at all?

The gross salary point is useful - have already agreed £9 an hour net, but I suppose I can put the gross salary in the contract. WOuld HMRC be best to advise on this or an agency providing nanny tax services?

On holiday, the way it works with her current employer (who is going down to 2 days) is that she chooses 2 weeks, and they choose 2 weeks - she said she is happy to have this as our arrangement too (although I can see how that might be complicated for her in practice). Given plenty of notice, I can of course be flexible.

SHould I include a formal job description in the contract - so we agree what to expect?

How do you know how much it's going to cost you - do you know their tax code at this point? Are they giving you a P45 or are they completing a P46 (and would you be their main job or not? Nanny could ask to split tax code between employments, though not sure if HMRC always agree to that.)

Net to Gross Calculator is useful to play with, will give you a good idea. I would have thought it would be best to renegotiate the contract with a figure you have in mind.

Worst case your 9 net an hour at tax code BR becomes 12.62 gross an hour.

Holiday entitlement is more than 4 weeks... it's 5.6 weeks (which can include bank holidays). So that is another thing you will need to look at. BusinessLink: Holiday Calculator

Info from ACAS about what MUST be in the written statement - job description is one of the things mentioned.

MrAnchovy (who wrote the great payroll calculator) may be able to give some wise advise.

The payroll company can run the payroll such that your nanny gets 9 net per hour, problem is though that you don't know what your nannies tax code will be and the code can change during employment... so your cost will vary.

By agreeing a Gross salary you know your costs much better, as changes in the nannies personal tax circumstances don't affect you so much (if at all).

I'm just trying to think of a few things I have seen asked on here before. Will you want her to work Bank Holidays? Will she have a kitty for days out and activities with the children? Do you want a daily diary (as mentioned in nannynick's post)? Browse through the questions on this board, to see if you can find anything else.

Oh .. and I used to work in Payroll ... agree a gross salary if at all possible

You can certainly write a gross salary into the contract and I would suggest that you do. Problem is that you have agreed to pay Net, so you need to rediscuss that situation with the nanny. The nanny may not be aware of how awkward for employers to agree net salaries when someone has more than one job. The nanny also may not be aware about the holiday entitlement situation either, as that will change in their first job as well. The 4 weeks plus bank holidays thing works ok if it's a full time 5 day per week job. When it's part-time, it's different as Bank Holidays may not fall on a working day.

Oh dear, you have fallen in to the second job net salary trap. I can't give more details atm, but you will need to renegotiate pay, possibly with the other employer. This might be easiest if you use the same agency as the other employer.

OK, here is the problem.

The existing family will be using a tax code of 747L. This means that they don't have to deduct tax from the first £144 of pay each week.

You will be using a tax code of BR. THis means that you will have to deduct tax from the whole of her pay.

So whereas the other family can pay her £144 in her hand net and it will only cost them about £2 of national insurance on top, that £144 net will cost you £50 in tax and NI! And so whereas your actual gross rate will be £12.49 an hour, the other family will only be paying £10.21 (this assumes 11 hour days, not sure if this is correct)!

There are three ways around this:

1. Convert her existing contract to the equivalent gross pay rate, and you pay her the same gross rate. The net rate for her existing job will be higher than the job with you, but if she is doing the same number of hours at the same gross rate then her net pay will be the same overall.

1. Get her to arrange to split her tax code. Her existing employer will have to pay her more gross to achieve the same net rate, but you will have some of her tax-free pay so (if you get the split right), the net and gross rates can each be the same for both employers.

1. If she is not willing to go down either of these paths with her existing employer (or if her existing employer is banking on taking advantage of the reduced tax burden), you will either have to accept that you will be paying more than you probably expected or try and negotiate her down.

She mentioned something about going self employed - but no more details than that. How would that work?

It wouldn't I'm afraid - these jobs would be judged as employment by the employment status test.

Did you know that you have to keep a copy of evidence that she is entitled to work in the UK?

She is British so I am assuming she doesn't need one! I will talk to her about the tax issue, thanks for all the advice