Net v Gross Salaries for Nannies

The nanny industry has for decades dealt in net salaries - it dates back to when domestic staff were traditionally paid in cash. However there is no reason why we should uphold the tradition, particularly as paying cash in hand is illegal.

The costs of employing a nanny

At Tinies, we have to juggle the expectations of both parents and nannies when it comes to salaries.

It is our policy to always talk to every parent about gross nanny salaries, and the impact of tax on a net salary, and make them very aware of the costs of employing a nanny. They are constantly reminded of their obligation to pay income tax and NICs (National Insurance Contributions).

When they talk about paying a nanny £350 net per week, we use our tax tables to inform them of the total gross cost per week. We also provide them with details of payroll companies (Nannytax and Nanny Matters) to help them organise paying their nanny.

And finally for nannies placed through Tinies, we provide an employment contract which only states a gross nanny salary in the salary clause.

Educating nannies - net v gross

The hard part, however, is educating the nannies about what gross salaries mean. Nearly all of the nannies ask us "What will I actually take home at the end of each month?".

They want to know if the salary will cover their bills, and so many of them still want to see in the job description what the net salary is for a job. Therefore we advertise a number of our jobs on a net basis. But again it is our policy to explain to nannies about net v gross, and that they should only take on jobs that pay their tax and NICs.

There is no good reason for a nanny to take on a job that pays cash in hand.

Our concern - cash in hand

Our concern is for those nannies who find their jobs on the internet - they have no-one looking out for them, and often they are "persuaded" to take a job that pays them in cash. Not only is it illegal, but it doesn't help those nannies in later life if they haven't built up a history of NICs - mortgages etc are much harder to come by without a long history of proper taxed employment.

If you are looking for any nanny salary advice please call your local Tinies branch.

Amanda Coxen, Working Mum and Tinies Director