Paying tax for before school care

[TheLionRoars1110]

Does anyone know if we would have to pay tax, ni etc if we are employing someone to do before school care 3 times a week. She'd earn £66 per week which someone told me is below the threshold of us needing to register as employer and having to pay tax. I can't find anything about a threshold on the gov.uk site and wonder if someone could point me in the right direction.

Yes if they have any other kind of income.

The threshold you have been told about is the Lower Earnings Limit for National Insurance, currently £116 per week.

www.gov.uk/guidance/rates-and-thresholds-for-employers-2018-to-2019#class-1-national-insurance-thresholds

IF the person had no other income of any kind and not have any more income at any time whilst working for you, then you would not have to register as an employer.

If they have other income, however small, you will need to do full payroll (PAYE). Due to the low pay, you would not be paying any employers National Insurance. You would not be deducting any employee National Insurance either. You may though be deducting Income Tax from your employee, as that is dependent on their total earnings from all their income.

As your employee, they will be entitled to paid holiday. If they are working term time only and cannot take that holiday during term time, then factor in that you would pay that holiday for a period of time during the school holidays.

If they worked 3 mornings per week, 38 weeks per year, then that is 3*38=114 mornings per year. Holiday added on would be 12.07% of time worked, which is 12.07% of 114 = 13.76 mornings. This can be rounded up but not down.

To put in money terms, if paying £22 per morning...
£22x114=£2,508
Holiday added on = £302.72 (12.07% of £2508)
Giving total of £2810.72

Pension - You will need to have a scheme in place but The Pensions Regulator does not require that your employee is automatically enrolled in the scheme due to their low earnings.

Earning £503 per week or less: "If they ask, the employer must provide a pension scheme for them, but the employer doesn’t have to pay contributions into a pension scheme."
If you are not registered as an employer with HMRC, you can't have a pension scheme created.

You are best giving a nanny payroll provider a call and having a chat with someone there who knows all the ins and outs about your duties as a small employer.

Payroll admin would cost you around £180-£220 a year, pension admin would add a bit more to that (if it was needed). So if you were to factor in the cost of three weeks pay to go towards administration, then you don't need to worry about if they got another job as well as working for you, as you would be the first employer and thus their earnings from you would be within their personal income tax allowance. Agree a gross salary so you know how much it will cost even if your nanny gets other work and decides to use their personal tax allowance in their other job.

Many thanks both! That's really helpful.