An idle question re nannies - why is their pay always stated net?

[spicemonster]

I have no intention of employing a nanny but I've always wondered why this is. As far as I know, the nanny job is the only one that is talked about in net terms. Is there an historical reason for this? Is it convention? Does it help/hinder working out how much you actually have to pay?

Bump - c'mon people I want to know!

No idea why, but it does make things more complicated from the employers point of view.

I am going to keep bumping this until someone tells me!

I don't know anything about it but I do know that nannynick is very anti the net salary.

Ah that is very interesting TFM. I always thought it was to benefit the nanny but maybe it is the employer? It is all most mysterious ...

The problem with agreeing net is the gross changes depending on how many hours the nanny works and if part time, whether or not she has another job.

i think it comes from days when nannies were payd cash in hand, no taxes and ni?

Net is generally better for the nanny as the employer pays any tax increases.

I don't know either but our current nanny is very clued up and told me her salary expectations on a gross basis. I wonder if this (thinking gross not net) is now being drilled into nannies during their training.

Prior to the introduction of National Insurance in 1911, as domestic servants, nannies would have been paid a weekly amount without this being deducted, and they would probably not have been liable for income tax either (income tax was only about 5% anyway). This was the first step towards the modern welfare state.

Initially, as I understand it, employers would have often paid the weekly 4d National Insurance charge on behalf of their staff, because they would have been used to picking up medical bills, etc for them anyway.

Over the subsequent century liabilities for tax and NI have gradually increased. However as nannies were still regarded as domestic servants, the archaic habit of paying them net seems to have continued.

I think 98 years after the National Insurance Act, we should abolish the practice of quoting net weekly salaries altogether, otherwise nannying can never be seen as a self-respecting profession.

Thanks for the history BoffinMum, expect you are right... nannies are one of the few remaining servants.

Tax free amount each year quite goes up, rather than down, so nannies who have a NET salary loose out on that. Employers can loose out big time, if the nanny gets any deductions made at source - such as repayment of Student Loan, repayment of some fines. With nannies now more likely to be doing 3-day, 4-day a week jobs, the tax side of things can become complex especially if tax their code is split between employments. For nannying to be seen as a professional occupation, we need to have NET wages being a thing of the past. Some agencies do advertise Gross Annual Salary jobs, but alas many still don't - probably due to them being run by an ex-nanny, rather than someone from a recruitment background.

I have no idea what my gross annual salary is

Tankie, details of your salary will be on your payslips - as payslips are always done Gross.
If paid monthly, multiply your Gross monthly pay (so pay before deductions) by 12 to get annual salary. You will also find previous pay details on your P60's.

I know I can work it out, but off the top of my head I have no idea! I have friends in other industries who say things like, "I'm on 17k" and I think well, I know what turns up in my bank account every week...

thank you BoffinMum - you are very clever

And thanks to everyone else too. I guess it's because the people who you work for are your employers, is that right? Would there be any merit in a nanny being self employed and just charging her clients an hourly rate?

Nannies can't really be self-employed, any more than say a bank clerk or barmaid could choose to be self-employed. Maternity nannies or temp/ad-hoc type nannies who move jobs a lot can be though.

Also, don't see there would be much benefit to a nanny with one permanent employer being self employed anyway as you would lose out on sick pay, maternity, redundancy etc.

That raises another question... why are some nannies paid weekly? Weekly payslips must be a real pain for employers.

Surely most jobs these days are paid monthly - I've never had a weekly paid job (don't even think my paper-round when I was a teenager was paid weekly). Is it just nannies that get paid weekly... or does this happen in other occupations (I know HMRC does tax tables for weekly paid employees, so guess it must happen in other occupations as well, just not in any I've done before).

I used to get paid fortnightly in a call centre nick, never been paid fortnightly before or since!

I am self employed so I always quote in gross

This makes me appear a lot more expensive than other nannies as they are generally quoting net

Once upon a time, nannies could be a Personal Service Company. However that was closed by Inland Revenue (see IR35) in April 2000.

Wonder if call centre staff are so temporary, that few stay longer then a few weeks!

We were all kept on temp contracts so they could get rid and re-hire us at will - some people had been there as on-and-off temps for years Worst job I ever had.

I used to help on a government helpline... so know how horrible doing call centre stuff is - though we only have 7 people in our 'call centre'.

Net pay I feel hinders employers in terms of working out how much their employee will cost. It is far easier to work out costs based on a Gross salary, as the employer then needs to not worry about the deductions. Cost to employer is Gross Salary plus Employers NI, plus all misc expenses such as activities kitty, food, light/heat, mileage payments etc.