Nanny pay in London - total confusion

[Emmiedarling]

I was hoping someone could explain to me in plain English - what on earth I have to do if I want to employ a nanny. I think i'm being a complete idiot, but I just do not understand!

What I want, is to pay £10-12 per hour for a nanny for 20 hours a week.

I am contemplating using an agency and/or Gumtree.

What do I need to say Im doing, paying net or gross?

My budget is around £900 per month.

Please someone help me?!!!

Gross.

Agree a Gross salary.
Then on top of that you will pay Employers NI to the government(HMRC).
You will have additional costs such as activities and travel while on duty.

Use www.mranchovy.com/calc/ to get an idea of what Employers NI is payable. Make sure you use the 2013/14 version of the calculator.

Someone more knowledgeable than me will surely come along. But in London you'd pay around £10ph net for a nanny. What generally happens is you advertise/negotiate the net salary with the nanny, but then put the gross salary in the contract. £10ph net comes down to £866.66 net per month, and then you have to gross that up to figure out the total cost to you - you can look it up online, looks like £200 net per week comes out to £223 gross per week (so £11.15 gross or £966 per month). The agencies still advertise/negotiate in net terms. The main thing is you need to agree a gross amount in the contract.

You should advertise, negotiate and put in the contract a gross wage.

In reality, some nannies still look for a net wage in the advert because they don't understand gross.

I would advertise gross, but with the approximate net in brackets e.g. Pay will be £10-12ph (approx £8-10ph net).

The problem is that x amount Net does not equal x - y gross, where y is a set amount. The tax deduction varies month to month and is dependent on the nannies taxcode, which also varies.

So whilst some nannies want to know how much pay they take home (net pay) you can not calculate that without knowing their personal tax situation. Plus it may change at any point.

We found a great nanny recently, and she specifically requested a net salary, so she knew how much she'd receive to cover her mortgage and other outgoings. So although we'd prefer to work with gross amounts, and stated so on our ad, we were happy to be flexible.

Also I should say we work with a payroll agency, which means no complicated maths to do, thankfully!

You are very foolish and here is why.

I would also be slightly concerned about employing someone who doesn't have the mental capacity to understand a gross wage!

Well "foolish" is probably a bit strong!

But yes, I will admit to not having up to date information about the vagaries of the British taxation system. Thank you, this is good info - I'll take it up with my agency, who it appears should definitely have made us aware of this. (I've used their contract writing service, which as of this week still allows employers to refer to net and weekly terms).

Hi Emmiedarling
I am a nanny and i have a job similar to the one you are offering - i work 20 hours a week over two days. I bring home £200 and my pay slip says £225 gross. I hope this helps you.

By the way i 'm looking for a second part time job to bring my hours to 40. I have experience and glowing references. If the job is still available can i apply please?
My e-mail is [email protected]. I can mail you my CV if you drop me a line.

Best Wishes
NannyAndLoveIt

Foolish may have been a bit strong , but it just sounds as though you know what you are supposed to be doing, but have been talked out of doing it by an employee. It's hard with nannies because it's such a personal relationship, but she is your employee and you do have a duty towards her as an employer. A net contract is bad for both you and her, it's your job as an employer to explain that to her and insist on a gross agreement.

If she needs to know exactly how much she will get after tax she can use MrA's calculator to work it out.