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Paid childcare

Discuss everything related to paid childcare here, including childminders, nannies, nurseries and au pairs.

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Original poster

Nanny Gross pay

15 replies

cloudchaos · 02/03/2023 18:47

Hi all

If we pay our nanny a gross hourly wage and she chooses to work elsewhere on her days off, are we completely covered from a tax perspective? There's no danger we get stung with a higher tax bill or any other problems if the other employer only pays her net for example?

Thanks

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senua · 02/03/2023 18:58

Make sure that everything is documented and you should be OK.
As long as you tax the work that she does for you in accordance with the PAYE code that HMRC give you then her alternative jobs / self-employment that she does in her own time are not your problem.

nannynick · 02/03/2023 19:05

Your cost is Gross pay + employers NI + employers pension contribution + payroll admin + mileage/activity expenses.

The other employer and you are not connected, so what they do does not impact on you. Your nanny should agree a gross salary with them, so they know their costs won't change.

One strange thing can happen but is unusual. HMRC makes a change to the tax code, which results in you giving your nanny a tax rebate. Your tax and NI payments for that quarter may be less then the rebate. This is unusual and I've only seen it in my one day per week job where there was no NI and no Income Tax until HMRC changed the tax code and then later on changed it again. If something like that occurs then you/your payroll provider can put in a claim to HMRC to have the additional money paid to you if the forecast for the year is that you won't ever have to pay that money to HMRC. An unusual situation so not likely to occur, especially if you are employing your nanny for several days per week.

Original poster

cloudchaos · 02/03/2023 19:22

Thank you. What if the nanny doesn't agree a gross pay with them and takes a net or cash in hand payment. Will that still not impact me because we are paying gross?

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senua · 02/03/2023 21:25

What happens in other employments is not your problem; just make sure that you are squeaky clean. Perhaps it is worth writing her an e-mail (so there is evidence of your squeaky cleanness) saying that you give permission for other employments but reminding her that it is her responsibility to keep HMRC advised of any changes (new address, new income from new sources, etc) in circumstances.

If she has agreed a net figure then that is not necessarily dodgy as long as the employer does a proper calculation back to gross. I used to run a lovely payroll programme that could calculate both ways: gross-to-net and net-to-gross. It was all above board.

Catsstillrock · 02/03/2023 21:29

Typically it’s your responsibility to pay your nanny the net and you pay the tax and NI owed on her earnings on her behalf and yours as employer to HMRC quarterly.

easiest to use a nanny payroll company to calculate this for you and provide payslips.

then you are covered

if you pay her gross and trust her to pay her own tax and NI to HMRC no you are not covered.

if they check they’ll say it was your responsibility as her employer to ensure the tax was paid and take the ‘gross’ amount as the net and charge you all the tax owed on top.

Hollyhocksarenotmessy · 02/03/2023 21:51

Never mind another job.

If she works for you and you pay gross without sorting tax, Ni, pension, you are probably breaking the law, as a Nanny is unlikely to count as genuinely self employed.

Do you give her paid holiday, sick pay etc?

Original poster

cloudchaos · 03/03/2023 06:15

I am paying her tax, NI, pension @Hollyhocksarenotmessy

What I am worried about is if she is receiving cash in hand from another job where that employer is not paying her tax, and whether I am somehow liable for it.

I would prefer she didn't work for others in order to ensure all tax is paid via me. But she wants to, so I'm trying to understand whether I'm opening myself up to any risk with this as I won't have a clue what the arrangements are with others.

The nanny agency say there's no risk to me at all, as I'm paying her gross. But I want to check that's correct as I read a few mixed things when googling and became confused!

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Original poster

cloudchaos · 03/03/2023 06:16

And of course she gets sick pay and holiday and has a contract. I'm worried about the other job!

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Original poster

cloudchaos · 03/03/2023 06:21

Additionally, have you ever worked for an employer who wants you to work exclusively for them?

She will work long hours - 48 per week, and gets a good gross pay.

I would rather give permission for her taking on extra work but is that a reasonable ask or not in your view?

I am worried she will be burnt out if she's working all weekends after a long week too.

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nannynick · 03/03/2023 06:37

Her tax is her issue. You have documents to prove that you have calculated all taxes due on what you pay your employee and that you have made those payments (some from you and some on behalf of your employee deducted from their gross pay) to the revenue and to pension provider.

nannynick · 03/03/2023 06:39

Working 48 hours per week she won't have much time available to do other work. She may do some occasional work elsewhere at a weekend for example.
i would not restrict that, unless you find she is coming to work tired - then have a discussion about her needing to be fit for work... so no burning the candle at both ends.

senua · 03/03/2023 08:26

Additionally, have you ever worked for an employer who wants you to work exclusively for them?
Yes. It is very common for employers to insist that you do not moonlight or work for competitors.
I would rather give permission for her taking on extra work but is that a reasonable ask or not in your view?
It is entirely up to you. There is a contract between you and the nanny; the terms of that contract are up the the two parties involved (as long as nothing contravenes law, professional standards, etc).

The nanny agency say there's no risk to me at all, as I'm paying her gross. But I want to check that's correct as I read a few mixed things when googling and became confused!
What did you google? There is a very specialist exception where you used to be able to avoid NI by bending rules so that route has been closed. The agency and we are saying it is OK but you still don't seem convinced - tell us what is giving you cause for concern.

Catsstillrock · 03/03/2023 13:47

If you’re paying / reporting all her stuff then outside earnings are her responsibility.

whether or not you ask her not to depends on a few things I think:

why does she want to?

Lots of people nannying have ambitions to do other things. Our last full time nanny did and that worked out well both sides as when the youngest started nursery she was happy to start reducing her hours so she had time to explore and start building up experience in what she wanted to move into.

we gradually dropped from a 40 hour week to 16 a week over two years eith

Catsstillrock · 03/03/2023 13:50

Whoops wrong button!

with the last six months her doing after school only during term time.

it gave her a regular income as she transitioned. We did have times when she was tired from juggling both but we rode that out as it suited us too.

if it’s just to earn more money, that’s different. Harder i think to say no, unless you are prepared to pay her more.

while you could add to her contract no other working, what she does when shes not working for you isn’t your business so I’m not sure how you’d police that.

Blondeshavemorefun · 03/03/2023 18:57

As long as you have gross in contract and pay slips what she does in her free time is up to her and won't effect you at all

Tho if she is tired after saying working 4 x 12hr days for you and then does a week day /weekend job - you can say as long as doesn't effect her working hours with you

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