employing a nanny for 9/10 hrs a week

[booboomonster]

I need advice. I am looking into employing a nanny for one day a week, for 9 or 10 hours. The nanny I have interviewed and liked asked for £10 an hour net (so £90 - £100 net a week depending on hours). When I look at all the calculators for PAYE and national insurance they seem start at payments of £120 per week. And I just read this online:

'As an employer you have a legal obligation to operate PAYE (Pay As You Earn) on the payments you make to your employees if their earnings reach the National Insurance Lower Earnings Limit. For the tax year 2011-12 this is £102 a week, £442 a month or £5,344 a year.'

So any ideas as to what should I be paying? I am not sure of the nanny's other work - I think she has a family she does ad hoc work for. Presumably this is something I need to find out.

Any advice gratefully received. thanks

It depends on if they have another job. I would suggest you assume they have other income and register as an employer and operate PAYE, until HMRC tell you otherwise.

Use www.mranchovy.com/calc to do an example calculation. Enter taxcode as BR. Adjust the figures for days and hours.

I'm halfway up Snowdon so can't check easily but I think you would be paying below the Lower Earnings Limit for National Insurance so there may well be no employers NI to pay.

AGREE A GROSS SALARY - Say £10 GROSS.

Agree with Nannynick. You are below the NI rates so no need to pay Employer NI and there is no Employee NI to deduct. Whether you need to deduct PAYE will depend entirely on your employee's tax code, which will also depend on what other income she has. If she has multiple employments then she can opt to have her personal allowance (£143.75 per week) either shared or allocated entirely to one job. It is obviously entirely unreasonable for you to have to pay a different amount depending on how she decides to arrange her affairs, so you should really agree a gross salary, and deduct PAYE from it as normal. Starting point is £10 per hour gross.

I just have to say, full credit to nanny nick for dedication to the mn cause! Why are you on here while halfway up Snowdon?!

Does she have another job?

If so, you will have to dedcut tax at 20% from the whole of her pay, so you REALLY REALLY need to agree a gross salary in line with the market rate, otherwise you will be paying her £12.50 an hour!

If not, as long as her earnings are less than £102, you will not have to register for PAYE or make any deductions (you should get her to fill in a P46 and sign it to confirm she doesn't have another job to cover yourself).

Oh, that information you quoted looks like it came from Business Link. It is correct, but incomplete. A better source is HMRC who give the full story:

"You don't necessarily need to register as an employer once you take someone on. Check first that at least one of the following conditions applies to you. If any apply, then you need to register:

• the employee already has another job
• they are receiving a state or occupational pension
• you're paying them at or above the PAYE threshold [which is irrelevant as it is always higher than the NI LEL below]
• you're paying them at or above the National Insurance Lower Earnings Limit [of £102]
• you're providing them with employee benefits"

thank you so much everyone for replying - it is so helpful! How fantastic to have such access to such informed and clever people. And yes - nannynick top marks for dedication. Assume you are on holiday? Have a good one. Thanks Ladymuck & Mranchovy too.
Good evening everyone!

Yes I'm on holiday - so I'm travelling around parts of the UK. I'm now somewhere near Sheffield and wondering what to do tomorrow.

booboomonster - if you have never had a nanny before, contact the New Employer Helpline and ask them to send you a P46 so you can establish if your new employee has another job, thus meaning you need to operate PAYE.

thanks nannynick! Hope you enjoy your holiday and avoid the riot!

.. or just print the one I linked to - hope you are having as good a holiday as I am Nick!