How much do you pay your Nanny? Post Reply

[2littlemonkies]

Hi Everyone,

I realise this is a very personal and slightly inappropriate question to ask! ... but I'm about to hire my first Nanny and despite lots of research, still feel unsure as to what salary range to offer.

So, I'd be really interested to hear what families are paying thier nannies in the 'between the Commons' area.

Also, how many of you out there are paying cash in hand on the basis that your Nanny pays her own tax? Does this arrangement work for you and do you still pay sick and holiday leave, and have a formal contract?

Having spoken to local mums, 'cash in hand' seems to be order of the day, however I feel much safer paying Employers' tax and doing everything above board. Am I being over-cautious? ....

Your thoughts please Clapham and Wandsworth Mummies!

[fatherof6]

£10.00 a hr and she pays her tax

[EHMorris]

My understanding is that nannies cannot be self employed therefore employers are breaking the law if they don't pay NI and tax - though I am not sure if this applies to part time / temporary positions.

There are a number of nanny payroll services who can calculate the tax and NI and provide you with payslips etc - google nannytax for some ideas.

We were recently paying £450/week net for a full time (7.15am - 7pm) live out nanny for our daughter, and also providing meals when she was looking after her.

Hope that helps!

[mulberrybush]

Thank you fatherof6 and ehmorris ... that's really helpful. We are looking for part-time and have 2 pre-schoolers.

I've posted an ad and have had lots of CV's in - almost all non-British. I assume British nannies will expect/command a higher salary? ....

We were budgeting for around £8 p hr, but it seems we're coming in way too low. I understand if we don't pay well we risk losing our nanny to another family who will pay a higher rate, and my worst fear in all of this is my little ones becoming attached to a nanny only for her to leave after a short time.

Anyone else out there willing to discuss?

[supernanny19]

I know a family that were fined £10,000 for not paying nannies NI/Tax. So you would be paying more than £8ph if you decide to go the cheap route!

Why not look at a local college, for a student studying childcare?

[acachildcarers]

I have heard some nannies say they do pay their own tax and national insurance, esecially if they work part time and work for more than one family. I would make sure however they have all the paperwork in place, evidence of being self employed etc, if unsure you can always contact the inland revenue.
We have quite a few English Nannies on our books who would take 8-10 pounds per hour, if you are interested pleas feel free to contact us

[claphammummy]

It is illegal to employ without paying employers' NI and deducting employee tax and NI at source. It's easy to do..and you don't need NannyTax (though if they charge very little, it might be worthwhile....) HMRC has a free software package and offers a freee 3 hour course on how to use it ---- well worth it. The course isn't strictly necessary though as it's pretty easy. You need to take into account holiday pay (28 days per annum, though whether you include the statutory hols within this is up to you so lon as the total paid holidays is 28 days) and potentially sick pay/mat pay. The HMRC software can do this.

I would def have a contract.

For anything more than one day per week regular work or ad hoc hours here and there, I wouldn't risk not doing things above board. While the chances of being caught aren't great, if you have a falling out with your nanny, she may go to HMRC. Yes, she'll be caught too, but as the party making disclosure to HMRC, she could cut herself a deal plus she's the vulnerable party (no speak English / me scared of boss etc) while you're supposedly the rich employer who has more to lose in terms of reputation, assets, etc. I wouldn't expose myself that way if I were you.

[aussiemum]

I pay £10 an hour plus taxes (I use NannyTax for payroll). I think it's worth doing it all above board, I figure that if your nanny is dishonest about paying her taxes could she also be dishonest about other things?!

When I was recruiting a nanny earlier this year £10 plus tax seemed standard for an experienced nanny with fluent English (I gather there is a premium for language skills). I also give her a float of £20 per week (3 day week) for lunches, groceries etc.

[kat*]

Think the nanny pay situation is confusing as they start off asking for a net salary, like a cleaner, but it turns out it is a much different relationship. Your nanny is employed directly by you and works when and where you tell her, so she can't be considered self employed and can't do her own tax.

We felt we needed to do everything above board just in case something was to happen. Also we didn't trust the nannies that just wanted cash in hand. Just think of what you would do if something went wrong!

We now pay tax, holiday, sick leave, etc - All the stuff you would expect to get when you are employed. She is ofsted registered so we do save a bit because we can use child care vouchers. We have a nanny share and she receives £10 net for two children and £8 for one child. It roughly works out about the same as nursery.

Best to treat your nanny how you would want to be treated as she is the one taking care of your little one.

[MGMidget]

I think it depends how experienced your nanny is. If money is an issue and you don't need supernanny, I would consider approaching colleges, e.g. Lambeth College for childcare diploma graduates looking for work. Its only October, some may still be unemployed, given the economy's not great. For a new entrant you could negotiate considerably down from the 'standard' £10 net some people are mentioning. Most new childcare diploma graduates would start nursery jobs on minimum or near-minimum wage so its not difficult to offer something considerably more generous. I don't pay the £10 net some others here pay, I negotiate a gross salary from which I deduct the tax and NI (as employers in other jobs do!). I also prefer to employ new entrants to nannying (I'm on my second) who are delighted to accept less for their 'career break' and don't give me any nonsence about wanting to be paid net! Of course its a personal choice, if you want and need the best nanny around, work extremely long hours and need 'supernanny' to deal with lots of complications then £9 or £10 net an hour seems to be the norm. I agree with others that paying cash is definitely risky - it is you who could be forced to pay later and as future employers will ask for P45s or ask them to complete a form explaining their previous job and earnings, unless your nanny is truly self-employed, you could get chased for payments later.

[nicoleblonde]

As a Nanny I have looked into the self-employed nanny thing at length and also spoken to HMRC. I was informed that only in a few circumstances is it legal to be a self-employed nanny: for example if a nanny worked a few hours a week for many different families, works lots of temporary positions in a year etc.

Anyone who hires a nanny becomes an employer and so must abide by all employment laws in this country. If you chose not to pay your nanny's tax and NI then the only person who is liable for a huge fine if caught is the employer. A nanny can never be fined for not paying tax and NI as it is her employers responsibility (unless she fits one of the rare self employment categories). And the fines can be thousands. I've known it happen to many families over the years so you need to be very cautious!

However I will also add that I know many many nannies who are willing to work "cash under the table", particularly foreign nannies as they have less of a need to prove their income in this country (eg applying for a mortgage).

Re the salary thing - I would say that £10ph net is the going rate for a qualified/experienced/fluent english speaking nanny, but you will find a lovely and capable nanny willing to work for £8-9 ph who has slightly less experience.

Good luck

[ans]

We are part of a nanny share, which works out a lot cheaper, (same as the childminder before) Look around and see if there is a family that wants to join or families looking for another to join.

We looked on this site as well as simply childcare. It works out to be a better option as we have a much better qualified nanny and our daughter gets more sociable childcare.

Our nanny gets £10.50 per hour and we pay tax and NI, although with the share because we are the one child out of 3 we pay around 40%. Each share is different.

Good luck with your search.

[acachildcarers]

Completely agree with the comments above RE: HMRC and self employed nannies, we don't take any on ourselves but have many applicants wanting to do this which as we are VERY aware is not permitted.

It works both ways in that we have many families wanting to pay "cash in hand" which we also do not take on. Just the other day a parent said to us "We don't want to ay tax and NI on our nanny" to which the polite response was "unfortunately we cannot assist you" - she muttered some very blunt things and hung up.

It is a shame for nannies who have trained to become qualified and experienced not to have things above board and there are plenty of legitimate families who are happy to cover costs such as tax and NI so why opt for the cash in hand route?

[juliantenniscoach]

I'm self employed and have/had/will have plenty of conversations with the HMRC. the issue is fairly simple. if your nanny is full time with you or the monies you pay them represent the majority of their income then they have to be "employed".

despite what has been posted "cash in hand etc" can still be legal if your nanny works at various locations or the nanny income is a minority of the total. however you should have a written agreement in place stipulating those circumstances. furthermore you must take reasonable steps to ensure that the nanny is legally entitled to work in the UK (in that employ).

furthermore there's nothing wrong or dodgy about being self employed. nor does reflect on anyone's ability to do their job. many people (myself included) prefer the options that self employed status offers.

the onus is on us to ensure that the paperwork side is correct (tax, references, qualifications). but as Kat posted, the most important thing is to engage that person on terms and conditions that all parties agree to. otherwise it will end in tears anyway.

[mummo]

It is a commonly held belief that nannies can be self employed, however it is not so much a 'choice' to be self employed but how the HMRC make the definition of what self employed status is. Be wary of employing on this basis and as juliantenniscoach says make absolutely sure that all the correct paperwork is in place if your nanny does claim to be self employed. It could come back to bite you, not them.

This is taken from nannytax.co.uk, see especially the last paragraph re self-employed status.

"When you take on a nanny you become a domestic employer and as such you have the same legal responsibilities as a commercial employer. It will be your responsibility to pay your nanny’s Tax and National Insurance to HMRC on the nanny’s behalf, as well as your own Employer’s National Insurance Contribution. You are also required to provide an employment contract within two months of the date they began working for you as well as a payslip each time they are paid and, in addition, you must keep payroll records and produce yearly accounts of all payments.

If you pay your nanny £102 or more gross per week, you must register as a domestic employer with HMRC and set up PAYE (Pay As You Earn) Scheme. If you are paying your nanny less than £136 gross per week there is no tax or NI to pay, however, if you are registered, your nanny will still be entitled to receive state pensions and benefits. If you are paying your nanny £136 gross per week or more, you must pay Employer’s NI. £139 gross per week or more means you must now also pay Employee’s NI on behalf of your nanny. Paying £143 or more gross per week to your nanny means tax is now due. These figures are effective from 6 April 2011 and the thresholds only apply if your nanny does not have another job and is on a standard tax code.


But it’s not my tax; can I get away with not paying it?

Absolutely not. It’s not the nanny that the taxman will be chasing; it’s you, her employer. You are not doing the nanny a favour by paying her Tax and NI on her behalf – you’re legally required to do so. It’s an offence to employ and not register as an employer with HMRC – you can potentially face hefty fines if caught, as well as interest on late payments of Tax and NI.


Can’t my nanny be self-employed and pay her own tax?



Nannies in permanent positions generally don’t meet the criteria set by HMRC for a self-employment status as a self-employed person can dictate their own working hours, whereas a nanny will be working to the hours that you, as her employer, will set. As her employer you therefore be responsible for paying her Tax and NI. Some nannies who supply an ad-hoc nanny service or some temporary nannies may be able to register as self-employed."