Revisiting hiring a nanny

[HarrietTheSpy]

I am looking at hiring a nanny again, part-time.

Now, I've just been on the phone with an agency - not one I am defo planning to use but to judge the market - and have said I want to pay £9 gross. My question is not is this reasonable, it's unfortunately a tax question.

They have said that I basically can't cap it that way in the contract, that it all depends very much on whether the nanny is also working for another family, and that it drives what her gross wage is.

When I quoted a gross wage, she worked back to net to work out whether it was reasonable. Do you think the issue NOW is that she's still thinking in NET terms, when she's saying I can't cap my obligations in the contract by agreeing a gross wage if the nanny works for another family?

Help. I'm getting scared of being an employer again.

The agency is talking... well you know what.

As a nanny I get paid less than £9 per hour gross. So yes, it is possible (dependent on location), plus yes you can stipulate the salary in the contract.

It makes no difference what the nanny earns in other jobs - you agree a gross wage for your particular job. From that you deduct the nannies Tax and NI, plus pay on top of the gross pay employers NI. The nannies personal tax allowance makes no difference, as the nanny completes a P46 if they are already in other employment, which then determines the starting tax code you use, and HMRC will inform you in due course if they want you to use something different.

The issue is that the agency in this case is talking in NET terms, when they should be using Gross. Good nanny agencies I know specify the Gross wage in job adverts, not NET. Based on the 'advice' given by this agency, don't use them - if you use an agency at all, find one which understands PAYE.

most nannies have a gross figure in their contract anyway

I cetrainly wouldnt have it any oterh way and every nany friend i know has the gross figure in the contract

Its mad not to, and protects both nanny / employer for chanes in the government tax rates / budget etc

When I said that I could agree a gross wage she goes: "Well, that's illegal." She assumed I was saying the nanny was self-employed. I really think she is very confused, but I assumed I was.

Also, her website says weekly nanny pay starts at - net 300-350 for FULL TIME. So it was quite bizarre she hemmed and hawed as to whether someone would accept my position,which is paying not so very far off that for three days only.

I think the answer is to side step these agenices - at least this one, as you say - and negotiate directly with the nanny. It's not just about hte fee (hers is relatively low in the scheme of things, £450 for the placement), it's that she goes: We send you the contract. Forget that, I am writing it after my last experience.

maybe you should try another agency for advice as this one seemed so unhelpful

Omega
I'm going to try the gumtree/simply childcare etc route again I think. And then get signed up with nanny tax or one of it's ilk.

Good idea. Plus of course, you can post here on Mumsnet and get loads of advice, from parents who have nannies and from nannies themselves.

I am in East London. Although I think I'm going to give gumtree and co a shot before resorting to the agencies, would really prefer not to have to cough up for the finders fees.

I was thinking about it - my own contract is of course gross, I would struggle to think of a case where an employee's wasn't but it sounds like that's pretty common for nannies? Althought NannyL says no.

Do you think it will be hard to get someone to agree in gross?

Also, I've been reading about people who give fixed term contracts here - say a year. I quite like this idea, but do you think a lot of nannies would baulk at this? I'm assuming that this doesn't make much of a difference anyway with things like redundancy, as I would imagine if the employee could demonstrate she'd been working for you for the two years (even if it's two fixed term contracts) the same woudl apply...or would it?

I've always agreed a gross salary with my nannies, and put it into the contract - but during 'negotiations' I give them a summary of the contract (holiday entitlement etc) and put in a line that says salary = £X,000 gross, on a standard tax code this would equate to £XXX net per week...so they can have an idea of how much take home pay they could expect.

Harriet - As a nanny, my contract is also Gross. Alas it is still common for agencies to advertise jobs as NET (perhaps because they assume nannies are thick and can't work out Net Pay), but ultimately the contract is Gross - as when doing PAYE, you work things out from the Gross pay figure.

Do you think it will be hard to get someone to agree in gross?
No, it shouldn't be. You can always direct them to www.listentotaxman.com where they can enter the gross salary you are offering, their tax code, and it will work out their take home pay - weekly, monthly, or yearly.

Fixed Term Contracts - As a nanny I would be cautious about such an agreement, unless the job was only truly for a fixed period. If you provide a fixed contract, your nanny may line up work for the end of that contract - and not have to tell you, thus if you then decided you wanted the nanny to continue - you may have to go through the recruitment process all over again.

Redundancy - Fixed Term Employees have redundancy rights. See DTI: Fixed Term Work Guidance

Think about why you would be offering a Fixed Term Contract. Is the job for a fixed period - if so fine. Otherwise, I feel it may be easier to use a normal contract (with a detailed disciplinary procedure and gross misconduct section, so each party is very clear as to grounds for termination).

One (probably) last question - has anyone else heard that it's no longer legal under EU law to have probationary periods? The reason I ask, is that we've recently hired people at work and they are no longer under 3 mo probation, as they used to be, and someone said it's because the laws have recently changed. Is this ringing any bells with anyone and do you know whether it affects nannies too? I defo need to put a probationary period in the contract and had been thinking three months...

No, not seen that. There is a case that has gone through tribunal which is to do with extending probationary periods - Przybylska v Modus Telecom Ltd - perhaps that is what has affected your work.

To be honest, I would not worry that much about it - trial periods are common place in 'domestic servant' employment situations. If the EU ruling exists, then it may only cause a problem if your employee left you and took you to tribunal for some reason.

thanks nannynick
do you think three months is okay or long?

I have always agreed a net wage and then nannytax tell me what to pay the taxman. I do think some nannies want to know what they are getting net. I pay £9 net in East London, which does seem to be the going rate but perhaps there are nannies who would accept less?

Perhaps a little long if it's a full time position (2 months perhaps), though if it's part-time then you may need that length of time to evaluate how well it is working out. Whatever period you agree of course is up to you and your employee.

Hi

I have a great part time Nanny - originally for 2 days a week, and now 3 days a week. I put an ad in the local paper (also looked on gumtree), and interviewed 5 Nannys. We had a 3 month trial in the contract, and agreed a gross wage - which I sort out myself, as it is fairly straightforward once you've registered with the Inland Revenue and got the tax code information.

Only problem was that when we went from 2 days to 3 - there was a big increase in the amount of tax for her to pay, and because she has been so good and we'd started her on a relatively low (for the area) salary of £8.50 gross per hour, we increased her salary to £11 gross per hour. This means she now takes home about £8 net.

You can use a fixed term contract for about 4 years before your nanny can claim permanent employee status.

Another way around this is to hire people from abroad who come over on a limited visa (i.e. holiday maker visa). They have to leave under the conditions of the visa.

If I had to get rid of a nanny I could never afford to fork over 4 weeks pay and pay for other child care. I also couldn't afford the inflated cost of a temp nanny to cover maternity leave.

So, I guess if I had to let a nanny go it would have to be on the grounds of being fired. It is much better for everyone to be on a fixed term contract.