Salary rise - tax etc looks higher than rise !!!

[Paloma12]

Hi - I want to increase my nanny's wage by £60 per week. According to nanny payroll, this will cost an extra £100 in all the taxes. Can that possibly be right? Tax, NI etc amounts to more than the actual payrise?

Are you talking Net Wage?

What is current gross salary per month or per week? It may be that the new salary is into a different tax bracket, though that would not make much difference unless you have a Net pay agreement.

Maybe you currently pay very low and so not paying employers NI. New salary being higher EmpNI applies.
Hard to know without the figures and knowing if a net pay agreement is in place.

If net pay, what taxcode? 1000L, BR big difference between those.

www.mranchovy.com/calc/ will show calculations.

That doesn't sound right. Are you sure it's not a total cost of 100, of which the nanny will receive 60 net?

Assuming your nanny has a personal allowance of 10,000

0 - 10,000 = 0% tax (personal allowance)
10,001 - 41,865 = 20% tax
41,865 + = 40% tax

(There is a 45% tax band, but I'm assuming your nanny isn't earning six figures...)

Employers NI is 13.8% on earnings above 153 per week.
Employee's NI is 12% on earnings 153 - 805 per week, then 2% above 805 per week

Maybe theymean an extra £100 a month.

I'm so dim - it's the gross figure comparisons. Thanks everyone!

So Gross plus Employers NI should be your cost.
Please avoid Net pay agreements. If you have one maybe now is a good time to change, agree the Gross pay amount.

No I don't have a Net agreement.