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Original poster

tax issues with being a second employer

30 replies

fasterthanthewind · 31/07/2013 21:46

I've just been talking to a lovely lovely (sounding!) nanny, about a 2-day/week job. She already nannies for another family, also 2 days/week, and has done so for a year.

I just looked at one of the nanny tax calculator things, and it said that if we paid her 200/week, it'd cost us 223 if we were her first employer, but 284 if we are her second.

Is it normal for the second employer to swallow the WHOLE of the tax bill? And if it isn't, then how on earth does this get broached, given that it's obviously not in the first family's interests to pay any extra?

OP posts:
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OutragedFromLeeds · 31/07/2013 22:21

It's not your tax bill it's hers. Agree a gross wage like you're supposed to and this wouldn't be a problem.

maja00 · 31/07/2013 22:23

Her tax isn't really something for you to worry about - pay her a gross wage.

nannynick · 31/07/2013 22:30

As others have said, do NOT agree a Net salary. Agree a gross wage, then when they start this job follow New Employee No P45 which will probably result in BR cumulative taxcode for this job. Your nanny payroll company can explain more about how this works, if you are using a payroll company.

Using MrAnchovy's PAYE Calculator 2013/14 with taxcode entered as BR, £200 per week Gross will attract Employers NI of £377.

If you have already agreed a Net salary with the nanny, then contact a nanny payroll company for advice.

Original poster
fasterthanthewind · 31/07/2013 23:00

I haven't agreed anything with her at all - I've not even met her! Good advice - I'll explain what we can offer, and then she can decide whether or not she takes it.

I don't think she will.

What urks me is that it's clearly clearly in her best interest to be paid under the table - and I'm sure there are lots of people who are more than willing to do that. And given that it'd 'save' over £3000 in tax each year, I can see why.

Thank you for your advice: I wouldn't have thought of it like this otherwise.

OP posts:
maja00 · 31/07/2013 23:02

It's really not in her best interest to be paid cash in hand - if she ever needs to claim benefits, take maternity leave or get a mortgage she will be screwed.

nannynick · 31/07/2013 23:12

Thank goodness you are thinking about this before offering a salary. It's so much easier to do things if you agree a Gross salary - then amount of the employee income tax and employee national insurance deductions are dependent on the tax code assigned. That coding can change, HMRC issue a PAYE Coding Notice, so for example if the nanny stops doing one of the jobs, things get adjusted. The idea is that total taxes paid in the year should be about right... though PAYE is not a perfect thing, thus why HMRC are now doing their new real time reporting system to try to improve it.

Unexpected · 01/08/2013 20:55

The problem I found in the past with second-jobber nannies is that they persist in thinking in net so they always want to know what they are going to end up with in their hand. So they will insist on, say £8 per hour, and when you convert this to gross for an amount to put in their contract it ends up being higher to you the employer if they have already used up their tax allowance with another employer.

Jellyandicecreamplease · 02/08/2013 10:31

Definitely agree gross - nannies are the only people I know of who think net.

OutragedFromLeeds · 02/08/2013 13:08

It's not only nannies though is it? It's nanny agencies and nanny employers. If everyone dealt in gross nannies would too.

CinnabarRed · 02/08/2013 13:10

But every other employed profession does think in gross. Every single other one. It would be different if nannieswere self-employed, but they're not. No idea why it's persisted like this for nannies for so long.

OutragedFromLeeds · 02/08/2013 13:24

Because nanny employers and nanny agencies persist in talking net! A lot of nannies come to nannying quite young and don't know any different. They look to their employers/the agencies and they're all talking in net.

The OP on this thread is an employer not a nanny. Presumably she has a job for which she receives a gross wage. Yet she still thinks her nanny should be paid net!

CinnabarRed · 02/08/2013 13:35

I don't know any nanny employer who talks in net!

We all know how much we can afford to pay, and then have to go through tortuous calculations to work out what they net is. It's a nightmare for us.

OutragedFromLeeds · 02/08/2013 13:47

Read the OP. She's a nanny employer.

Go on gumtree and look at the ads.

Go on childcare.co.uk and look at the ads.

Go and look at some agency websites.

The majority are in net.

OutragedFromLeeds · 02/08/2013 13:50

'then have to go through tortuous calculations to work out what they net is. It's a nightmare for us.'

If you're a nanny employer who talks in gross why are you working out the net at all?!

CinnabarRed · 02/08/2013 14:05

Yes, I am a nanny employer, as are several of my friends and colleagues.

And employers have to know what net their offering because the nannies talk in net! That's literally the only reason. All the agencies I've spoken to are happy to talk in net or gross to me, and have been helpful in suggesting conversion sites.

I can't speak for every nanny employer, obviously. But every one I've ever spoken to would much rather everyone worked in gross for salary negotiations.

I don't think it washes that nannies start straight from school with no experience of the working world, because (i) many nannies do qualifications; and (ii) so does everyone else, and we all manage!

maja00 · 02/08/2013 14:14

Why not just say then, gross is £xx, net will depend on your tax code so work it out yourself like everyone else.

Jellyandicecreamplease · 02/08/2013 14:20

This is what I do

OutragedFromLeeds · 02/08/2013 14:24

Nannies talk in net because that's how nanny jobs are advertised. It's a vicious circle! If ALL nanny jobs were advertised gross, they'd deal with gross wouldn't they? They'd be no choice.

'All the agencies I've spoken to are happy to talk in net or gross to me, and have been helpful in suggesting conversion sites.'

They shouldn't be should they? They should only speak gross to you and to nannies. They should tell you not to convert into net. That's the only way it's going to change.

'many nannies do qualifications'

They don't cover net/gross pay in nanny qualifications, although I agree it would be useful if they did!

'so does everyone else, and we all manage'

but when you emerged from training were the jobs in your field advertised net or gross? If every job you saw advertised was net would you maybe think that was the way it was done in your industry? Can you see the problem?

When you advertised for your nanny did you advertise net or gross?

NomDeClavier · 02/08/2013 14:30

Nannies also talk to each other and they all talk to each other net, so most new nannies coming into the profession talk to other nannies and end up with this expectation of a net salary.

It dates back to the days when domestic servants were exempt from certain payments but those are looooong gone. Still this weird custom persists.

It has improved hugely in recent years, with more nannies getting a gross amount agreed in the contract and getting clued up on the difference, but the jobs - which means the agencies and the employers - are still offered net and until that changes nannies are going to think in net to compare.

Cindy34 · 02/08/2013 16:50

Agencies are the problem I feel. Too many are run by ex-nanniess with no recruiting experience and thus who just do what happened when they were a nanny years ago.

If agencies were banned (may need legislation) from talking net wages, things would stop with luck.

Meanwhile it is nice to see that on here and some other forums more nannies and employers do talk gross salary, though many nannies probably do not use the forums and so don't know about the pros and cons of net vs gross.

Nannyowl · 03/08/2013 10:13

OP
As others have said just offer a gross wage.
The net amount may be low if the nanny has used all her tax allowance on her other job; but she should be aware of that. She can if she wishes split her tax allowance between the two jobs.

nbee84 · 03/08/2013 11:10

I think wages, tax, national insurance, pensions etc should all be on the school syllabus. It's something that all youngsters (and oldsters Grin) should know about. I've had to go through it with both my children (19 and 24 year old) when they've first had jobs.

traintracks · 06/08/2013 08:22

I have just employed a nanny who insists on talking in terms of net. I made it clear that when I worked out the gross salary which is on her contract I would assume that the tax free allowance was split between me and her other employer as I'm not subsidising someone else's nanny. She agreed to that.

Cindy34 · 06/08/2013 09:24

Traintracks, how did you know what the tax code would be with the split? Is there a way of working that out.

Blondeshavemorefun · 06/08/2013 09:45

It is a vicious circle. I discuss gross and many agencies and jobs and parents in my area talk nett

Look on nannyjob and gumtree - most are nett

I can go for interviews and say I want xxx gross and 99% of parents say what is that nett? Do we need to pay more on top

I quote the salary I want daily/weekly/yearly and say plus employers ni on top

Which tbh I think should be scrapped. What exactly does employers ni do?

Nannies pay ni - employers do out of their wage so why do they need to pay maybe another £2.5/3k a year to employ a nanny?

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