Sorry this will be long as it's best to go through the calculations to see what is happening.
PT live out nanny for 2 days a week (15 hrs)
Nanny 1 - at £14.50 gross (she's finishing up a full time job and will only have one other job one day a week only)
15 hours x 14.50 gross per hour = £217.50 gross per week, £11,310 gross per year.
As this is over £10,000 then Auto-enrolment pension applies.
Pension done on Qualifying Earnings (which means based on £11,310-£6240=£5070) @ 3% employers pension contribution = £152.10 pension contribution in a 1 year period.
Payroll admin inc pension admin... budget for around £200-£250 per year.
Employers NI on £11,310=£348.04
So before activity costs, mileage if nanny uses their car, then you are looking at around £12,060 annual cost to you.
Nanny 2 - at £12.50 net (not working anywhere else currently)
Don't agree to net.
So first is to gross it up. To do that we need to know what other work that nanny has got, they have not got any, so we will assume they have full personal allowance - this is an assumption! This is where it becomes dangerous agreeing net as you don't know their financial situation. So if we also assume they have earnings exceeding their monthly personal allowance equivalent, then we can predict that Income Tax will not be payable of £1041.66 of income each month.
My PAYE calculator tells me that a gross salary of around £12.54 would get the desired result in of £12.50 take home, if they had a tax code of 1250L M1. This is an annual gross salary of £9781.20 which is below the auto enrolment threshold for pension. Though they would a right to opt in. Lets assume that they won't opt in... again we are making an assumption and those are dangerous.
So £9781.20 gross annual salary, Employers NI of around £137.16.
Same payroll costs as before to keep it simple.
So total cost to you of around £10,168.36 however this can dramatically change at any point due to being a net pay agreement!
So do not do this. Instead offer the candidate assuming you have decided that they are the best candidate for your role, a gross salary. How about £12.60 gross per hour, £9828 annual gross. Or you could offer higher to make sure the desired net amount is usually achieved.
Budget is concern. I called up a nanny tax company and they said that the gross rate nanny @£14.50 was cheaper than the £12.50 net nanny.
Well my calculator does not agree, neither did you. However the costs of agreeing a net pay is unknown, it exposes you to potential costs. Maybe they had based a calculation on the nanny only using part of their personal tax allowance, such as 35%, 40% which might happen if they got other work... or worse still 0% if the nanny got other work and allocated all their personal allowance to the other job - which is possible for them to do!
So I think comes down to the assumptions being made, which is dangerous. Whilst we are right to assume full personal allowance will be applied to the role, it may not remain the case going forwards as the nanny may get other income. Maybe the payroll company where trying to put you off agreeing a net wage.
I would pick a gross pay figure you are happy to pay, then talk to candidates only in terms of gross salary.