Paying your Nanny
All workers in the UK, if they are earning enough to do so, must contribute to the economy by paying Tax and National Insurance. This is done via employers who collects what is owed from the worker’s earnings and pay it to the government on their behalf. This is done through Paye As You Earn (PAYE) via Her Majesty’s Revenue & Customs (HMRC) who is responsible for the collection of taxes as well as enforcing regulatory rules such as setting thresholds and the National Minimum Wage (NMW).
Nannies are no different and nanny employers have an obligation to operate a PAYE Scheme to ensure the nanny’s contributions to the state are paid. The process is, of course, known as payroll and all payroll activities must be reported to HMRC via Real Time Information reporting.
Tax, National Insurance and anything else such as Student Loan or debt repayments, can be tricky to calculate accurately if you are not used to working with the UK system. Deductions, as these are known, are always a percentage of the gross earnings; tax thresholds apply according to what the worker is earning; and if the nanny has more than one job, this will affect their Tax Code which governs what payments are due.
Employers are also responsible for administering Statutory Sick Pay and Statutory Maternity Pay if required and, now that Workplace Pensions are in full effect, for administering Auto Enrolment by correctly calculating pension contributions (if the nanny qualifies) and managing a pensions scheme.
All of this may sound daunting but there is a very easy way of dealing with this administration and ensuring that everything is done properly . . . by subscribing to a nanny payroll service such as Nannytax.
Since 1993, Nannytax has supported thousands of families and nannies, throughout the entire nanny employment journey. By providing comprehensive payroll administration, HR support, online facilities and now also end-to-end Workplace Pensions administration, nanny employers across the UK find peace of mind with Nannytax, knowing that all their legal obligations are taken care of.
What does Nannytax do?
- Register you as an employer HMRC
- Open and operate a PAYE scheme on your behalf
- Calculate Tax, NI and any other deductions
- Provide weekly or monthly payslips for your nanny
- Calculate what you need to pay HMRC every quarter
- Submit Real Time Information (RTI) reports every pay period
- Process P60s, P45s, P11Ds, P35s and other tax related documents
- Administer Statutory Maternity Pay, Sick Pay and Benefits in Kind as required
- Provide a bespoke Contract of Employment and ongoing HR advice from a team of specialists at Nannytax HR
- Provide an online Members area for you to manage your Nannytax account
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