childminder /nannies

[emy1]

can some one tell me the diffence please

pros and cons

emy1 - yes you have to pay tax and ni - it adds up to 25 percent or more on top of the net pay. Nannytax have a calculator on their website to work it out. It can get very complicated if you are not the main employer (ie if they work pt for you and pt for someone else, because a certain amount of the pay is tax free (as with anyone) and you need to work out which employer that gets allocated to or if you split it. Re the tax situation - it's not quite accurate to say that there are no tax breaks. Your employer can opt to pay you part of your salary in child care vouchers. At the moment, you don't pay ni on these and you can use them to pay for childcare at nurseries and with childminders. However, from April onwards you don't pay tax on them either and nannies can also register to be part-paid in them .

Some nannies will walk dogs and some won't. You don't need to think of this as employing someone with a pre-conceived job description. It's a contract betwen you and another individual, and between you can agree whatever you like - there are no rules.The important thing is to make sure you are clear. If you want walking the dog to be part of the job you just have to make sure you are clear about that - along with any other respnsibilities you want them to take on. Write up a job description and show it to anyone you interview. Some would refuse it, some won't, some might ask you to change bits of it.

emy1, you will have to pay employer tax and ni. You can pay a nanny in gross. You must, as an employer, withold her taxes and pay them to the government for you but there is no law that says the employee taxes can't be deducted from her gross pay. Some people will pay a nanny net (which mean her share of the taxes come out of your paocket and not her pay cheque) But, this is not required.

Uwila - having used nannies for the last 6 years and being an accountant - I can't for the life of me see why there is any difference between your two options!

At the end of the day the nanny gets her net pay and you pay the deductions to the IR irrespective of whether you have agreed a gross pay or net pay with her.

The reason why most people talk about net pay is that that is the conventional way that nannies talk about being paid. It is therefore the net pay that the nanny will use to benchmark her pay to the market place.

Nevertheless you are still paying a gross pay and making appropriate deductions and on her payslip this is how it will be set out!

Soapbox, some people believe that a nanny should be paid say £300 / week. There is a BIG difference between £300 gross and £300 net. Obviously, the taxes on £300 are taken out of that £300. But a nanny who makes £300 net, the employer has an additional expense of paying her taxes. As as accountant, I'm sure you know what I'm talking about (better than I do!) I've included that clarification for other who may be reading this thread.

i think what Uwila meant is you can quote her salary gross. (rather than pay gross) But it's unusual to do so, and most nannies would want to know what that meant net

perhaps if you say the gross pay it sounds like you are paying more money????

So if you say you pay your nanny/au pair £300 per week

but if that is before board, tax and NI is taken off

The nanny/au pair ends up with £200++

Surely if everyone expects to hear the net pay then they will think it is a good wage

Nannies are of the the very few professions that get paid "net"

Every other job quotes wages as gross

But Uwila - it doesn't really matter whether you say gross the nanny pay will still be benchmarked on a net basis as that is how the market works!

However, I would agree that now and again it does no harm to let them know how much they cost you in gross terms and how much you need to earn in gross terms to be able to pay them that amount

Uwila

The question is what did you say at the interview?

If you told her the amount of money she was going to get in her hand each week then that it fair enough

because if all the other jobs that she looks at are advertising net and you are describing gross then it is not a fair comparision is it?????

For nannies I would say that you have to be very honest at the interveiw stage and quote both gross and what this would be net in there hand.

Also be very upfront about what you want them to do in regards to duties other than child care. Younger and unqualifed nannies won't mind doing a bit of house work usually, but qualified experienced nannies will usually want to stick to child related duites only.

When I had a live in position it was only once I was employed and moved in it became clear the hours were longer (they had just taken over a restruant), the kitchen was to be scrubbed and mopped everyday, hoover the whole house, do all the laundry and iron Dads shirts. I drew the line at the ironing. If I had more experience I would have walked out.

So I,m just saying be honest about what you expect. What ages are your children I think this is very important as to the type of childcarer that is suitable.

You have got onto a subject that really makes me mad about the whole business of employing nannies.

What other "profession" talks in terms of net salaries? Everyone else has their salary gross and gets taxed at a higher rate the more they earn. However nannies are effectively cushioned against tax hikes by the generally accepted (including the agencies) talking in terms of net salaries & agreeing net contracts.

Of course I do realise that the reason that this has happened is because a lot of nanny employers pay all or part of their nannies salaries cash in hand and don't pay the tax to the Inland Revenue. It really annoys me as those of us who don't break the law have to live with a distorted market price for nannies as a result of this. (I'm not saying that nannies aren't worth paying for - just moaning that some of us are paying a lot more for them than others).

I work in the public sector I am v aware of fact that taxes pay my salary & provide important services to all of us - why do people think its okay to avoid them.

Finally its not fair on nannies not to pay their NI - it goes towards their pension.

Candid - I think you'll find that in most cases it is advantageous to the employer to pay net as it is usual for tax allowances to be increased each year, resulting in a decrease in the tax paid.

If the salary was quoted gross then these decreases in tax would go to the nanny.

In my experience of employing nannies the only time it has gone against me was when there was a 1% increase in NI. Every other year has seen a small decrease in the tax payable.

I agree that not paying the tax and ni is appalling. I do wonder if the convention of quoting a nanny's salary net goes back a long long way to the days when a nanny was in some ways the employer's responsibility, iyswim. To me it seems like something a bit Victorian, with the fanily dealing with the financial side of things and the nanny not having to worry her pretty little head. I think it's a convention that extends to other "domestic" staff, which is why it makes me wonder if that's what it is. It's all a bit bizarre in this day and age, when, as far as most people are concerned a nanny is not one of the "domestics" but a professional employee, one of a handful of childcare options for reasonably ordinary folk.

Bet all that's helped clear up your confusion, emy. (not).

emy, if you do ytr SimplyChildcare - or any other means of finding a nanny or nannyshare - whatever price the nanny wnats - or you are prepared/able to offer, you will need to pay NI and Tax on top. There are simple ways to do this - don't worry.
if you find a childminder, the price is the price quoted, no extrs!

I really hope you find something suitable asap - i know you have had a hard time.

If you find a nannyshare, it may be that the original employers take care of the 'mechanics' of all the tax / NI, and all you need to do is 'but into' their system.

I agree Soapbox with your allowances point.

However the net pay thing can go against you when you employ a part time nanny who is also employed by someone else.

If they have her personal allowance, it can end up costing you a lot more than them to pay the same net salary. In fact you might have to add approx 50% on top of the agreed net, which can come as a bit of a shock.

Sorry emy1 if this is confusing & tediously accountantish but it helps to know before you blow your budget.

Candide - re shared nannies - it doesn't actual;ly work like that. You both have an allowance! So with a shared nanny between you you actually pay about £1000 tax and NI a year. You should talk to someone like nannytax as I fear you are paying the wrong amount of tax.

I can't for the life of me think why one family in a share would pay more tax than the other!

Oops that should say £1000 less tax and NI per year.

You're right Soapbox in the case of a share where you know the other people and have a nanny between you from the start.

What I'm talking about is the situation of a nanny working 3 days for one family and 2 days for another one, where the two families don't know each other & the jobs start at different times. The first family to employ the nanny will most likely get the allowances & I imagine that they are unlikely to want to agree to donating some of them to another family.

If you do know a way of avoiding this situation I'd really like to know. I expect you'd have to get the nanny to do something like write to IR and get her allowance split across jobs, which might piss off her first employer.

Sorry Soapbox - I'm only talking about the tax allowance, I agree you do both have an NI allowance.

Candide - I think it would be worth your while speaking to nannytax. Even if the other employer are getting all of her PAYE allowance, I think you can get two lots of NI allowances which is worth a fair bit!

Its worth a phone call I think

Sorry - posts crossed!

I think that you should share the allowances though - but I agree that it might be hard for the nanny to orchestrate

Why not give nannytax a ring and see what they think??

I think Hatsoff is exactly right. Paying nannies(and other domestic employees) net comes from a time when domestic workers were not protected by employment laws, and didn't worry about such things as taxes. Today, these people are all regarded as employees (just like any other paid staff position). But, some would like to have their cake and eat it to. Which is it? Do you want to be paid net, or do you want to be an employee.

I raised this issue to let emy1 know that she is not bound to pay net. Although the agencies will tell you this is how the market operates, it is not true that everyone does this. And there is no legal requirement for you to do so. Obviously, if you hire a nanny who requires to be paid in net, then that is something that will need to be negotiated with her. But, it may very well be the case that her last employer paid her in gross, and she will be happy to accept that from you too.

As for what we discussed at the interview, I resent the implication that I may have disussed one thing,and then slipped her a fast one by actually paying a lesser amount. The offer was in gross. I went so far as to outline some sample conversion rates and tell her what the current tax would leave her in net. We reviewed this contract at the interview.

In the case of a nanny share it is techincally up to the nanny to decide where she wants to use her allowances, if the whole thing is conceived as a nannyshare in the first place then it is usually split 50/50. But candide is right - if you employ a nanny that already has a part-time job, where the employers will already be getting the benefit of the allowances, you end up in the situation of asking your prospective nanny to ask her existing employers if the allowance can be split - ie if they will pay more tax. Most nannies and existing employers will tell you to bog off. Leaving you paying tax on the entire lot - which makes a huge difference. The whole net thing is very wierd - I have a 3 day a week nanny and, luckily, she neither has nor wants another job. If she wanted one she'd find it hard to get one because the other people would need to pay so much more, or I would need to absorb a hike in how much tax I pay. It's an element of nanny shares that isn't very well understood.