How does nanny pay work if only employing 2 days a week and another family employ for 3? Post Reply

[AnnieH]

Hi

I'm completely bamboozled.

I am looking to employ a nanny for 2 days a week, she is employed 3 days a week with another employer.

I assumed that we would pay 40% of her annual cost (including tax / NICs) e.g. £37k x 40% = £15k a year, which would mean we were effectively getting 40% of her tax allowance.

I have just been told that i will be classified as a second employer so it looks like i will now end up paying c. £2k more than this.

Am i going mad, as this seems crazy....

[Kinga27]

You might want to ask your nanny to be self employed with u but i understand you both may not like to do that.

[pie81]

You (or rather the nanny) can ask HMRC to split her tax code between the two employers. This means you each get a share of the tax free allowance rather than it all being used up by the first employer.

However - if the first employer has agreed to pay the nanny a net rate (ie they have guaranteed her £X net and they pay whatever tax is needed to achieve that) then they will probably not agree to this as it would mean they have more cost overall. If they have agreed a gross rate with her they should not mind, I think.

You could speak to a nanny payroll company like Nannytax or PAYEfornannies, they will often provide a bit of free advice if you are a potential customer.

[stayathomemuminsw11]

We had exactly this situation- ditto what Pie81 says.

It's a pain if the first employer won't split the tax code though, as you do end up paying a lot more!

In the end, we went with a nursery instead.

[dudette]

It's really about time nannies and other domestic staff joined the 21st century and agreed gross tax rates with their employers. Could you not ask her other employer to switch to a gross rate? The problem is with the agencies who tell the nannies they should ask for a net salary and with the government/HMRC who should make it illegal! Nannytax (who are very good by the way) have info about this on their website so it might be worth taking a look or even calling them (or whichever payroll agency her other employer uses).

[mirkaj80]

Hi I'm nanny and I always have 2 or 3 nanny jobs. It is illegal for nanny to be sel-employed therefore I always agree with families gross pay. This way there's no confusion how to split the tax code.Both families pay the same amount. I have been doing this for the last 10 years and it has worked well for me and the families.

[RobertJohnson]

Thank you for sharing idea.

[Karmen]

Hi,

I had 3 employers and they all split the tax free allowance. Talk to HMRC and they tell what to do. Good luck!

[juliantenniscoach]

@mirkaj80. In theory a nanny could become a sole trader couldn't they? (if they wanted to). HMRC seems to give conflicting advice on who and who cannot be self employed. Best wishes.

[mirkaj80]

@mirkaj80. In theory a nanny could become a sole trader couldn't they? (if they wanted to). HMRC seems to give conflicting advice on who and who cannot be self employed. Best wishes.

I have been told that nanny isn't allowed to be self-employed as she can't choose her working hours or can't employ people, but of course there are always exceptions (e.g if she works for more than 2 families - but in this case she needs to register as a childminder not nanny)

[juliantenniscoach]

Thanks very much for clarifying.