Does anyone employ a nanny for less than 10 hours a week?

[elliott]

OK, well having taken the step of signing up with a nanny agency, not really expecting to be able to find anyone suitable for my little job of two days a week after school care for ds1, I've actually been sent a CV of someone who is interested! V experienced and looks potentially suitable on paper, definitely worth interviewing. Now I'm panicking about what to do next!
Specifically, I'm worried about the complexities of tax and employment responsibilities and whether its worth it for such a small amount. She'd be doing 2x3 hours a week termtime; and I think probably one 9 hour day a week in school holidays. This particular candidate has another job on the other three days (I don't know the hours yet). My questions are:

1. Will I end up paying a higher % tax because her other employer is taking all the personal allowance?
2. If I employ her Mon and Tues, will I end up taking all the hit for the bank holidays?
3. How will we agree holidays between employers?

I realise these are things I need to explore with her, but wondered if anyone has any advice they can share from a similar situation.

oh, and what about maternity leave? Who pays the SMP if there is more than one employer?

You could try posting this on nannyjob where Nannynick will definitely see it, although he does also use mumsnet - he is the fountain of all knowledge on these kinds of topics!

Try also the nannytax website.

Most things non-tax related can be writen into the contract of course.

You would be surprised how this kind of job suits nannies who are looking to top up their hours if they are part time for other families.

Good Luck.

Elliot,
Not sure that there is a "right" answer, but here's what I'm doing, in case it helps!

1. I've used one of the online PAYE calculators to work out what her gross salary should be (so effectively, and have fixed a gross salary rather than net salary. In doing so I have explained that the gross salary assumes that she is sharing the tax free allowance across all of her jobs. You may discover that you will be below the NI amounts anywya. I've never found the admin to be that much of a hassle, and you get a rebate if you file online.

1. I pro-rata bank holidays and annual leave. So annual leave is 20 days + bank holidays is 28 days. She gets the pro-rata amount, and then has to use "leave" towards bank holidays if she is not working. I've also offered flexibility to swap days if that would work for her instead.

1. I have a stipulation that 2 weeks holiday is at our choice, the rest is hers. It does make it more difficult for her though. I'm in a position to be flexible, so would allow here to have some unpaid time if she couldn't fit here holidays in with ours.

HTH

We used a PT nanny like this before. I got in touch with her main employer and she sorted out the tax. I used to pay the nanny cash weekly and I contributed monthly towards her tax directly to the other family.

1. Agree a GROSS wage. As an employer you need to deduct your employees Tax and NI contributions from that GROSS wage.

As the job is such short hours, I feel it would be sensible for the other employer to use all of the personal allowance, and for your job to be done at Basic Rate (BR). When completing the P46, the nanny needs to just sign the form, not tick any boxes. \link{http://www.hmrc.gov.uk/forms/p49.pdf\P49} explains about paying an employee for the first time.

How much would your employee actually be earning?

For simple maths, lets say that termtime (36 weeks) it is 6 hours, at 10 per hour = 60 pounds and school holidays (16 weeks) it is 9 hours at 10 per hour = 90 pounds.
Total per year is therefore 3600 pounds, divide by 12 is 300 pounds per month, just under 70 pounds per week average.
This is BELOW the current Lower Earnings Limit of 82 pounds per week.

I therefore suggest that you contact the New Employers Helpline 0845 60 70 143 and talk to them about what tax paperwork you have to do. You will need to tell them that your employee has another job, so combined earnings will be over £82 per week, but that in your employment, the earnings are less than £82 per week, thus ask what you need to do regarding NICs and Tax deductions as in your employment the employee is below the current PAYE Threshold of £94 per week (£404 monthly).

You can find the 2005-2006 tax year PAYE and NICs thresholds and rates at \link{http://www.hmrc.gov.uk/employers/rates_and_limits.htm\Rates and Limits}

1. No employee has the right to be paid for Bank Holidays. Best to write this into the contract so there is no confusion at a later date. See \link{http://www.acas.org.uk/index.aspx?articleid=806\ACAS Holiday Pay Leaflet} under the question: Do employees have the right to paid leave on public holidays?

1. I don't feel you need to agree anything with the other employer. Your nanny can submit a request for holiday, and you either agree it or deny it. If you give 4 weeks holiday to your employee, and if you are nice and round up the hours so that average per week for holiday calculation purposes is 7 hours, then your employee gets 28 hours holiday per year.

1. SMP, not sure on who pays if more than one employer but looking at your case, I don't think you will be paying enough anyway to be required to pay SMP. Another question to ask the tax helpline.

Hope that's of some help. It is my understanding of the situation, which could well be wrong - but hey, I've given you some links which show how I came to the conclusions.

that's all very helpful, thanks. nannynick I think you have described the situation very well, I may have some more questions once I've thought about it some more. I presume all the tax and NIC thresholds are based on gross wages?
I've perhaps rather rashly indicated a net wage on the agency form describing my job, but not a particularly high one. I really need to find out how many hours she's doing with the other family. Oh, and hope that I do actually want to employ her once I've met her!

Yes, tax and NICs thresholds are based on GROSS Pay.

Glad to have been on help.

.