Childcare and Nanny Payroll Service Detail
If you employ a nanny in the UK and you pay them more than £149 per week (tax year 2013/2014) you have to comply with certain payroll and tax responsibilities
What are the legal obligations when you hire a nanny
When you hire a nanny and become an employer, UK law requires you to:
- Register as an employer
- Set up and operate a PAYE scheme on your employee's behalf
- Keep tax records on their behalf
- Provide your employee with regular payslips
- Provide them with an employment contract
- Pay regular income tax and NI contributions
- Pay employer's NI contributions
- File an employer's annual tax return.
This obligation applies even for short periods of employment, and to all employment taking place in the UK, irrespective of the country of origin of the nanny, or of the employer!
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What is nanny national insurance
Nanny National Insurance is the term used to describe the various taxes, contributions, and insurance premiums required of employers who hire nannies in the UK. Nannies are classified as employees, and thus employers must pay income tax and National Insurance contributions on their behalf. National Insurance contributions go towards your nanny's statutory entitlements such as unemployment benefit, state pension and SMP. Not declaring their salary in full is not only illegal but also affects these and other rights.
Are nannies self employed?
Self-employment is not an option for nannies as they do not meet the HMRC criteria for self-employment. If liability to pay tax is not declared to HMRC, and this comes to light, then it is you, the employer, and not your nanny, who will be pursued for payment.
Responsibilities when employing a Nanny
Becoming an employer, especially for the first time, can be both stressful and confusing and without working knowledge of the tax system and current employment law you are entering a minefield.
Businesses use skilled payroll, legal and human resources professionals. Now you can too - at a fraction of the price. Tinies recommends two nanny payroll companies to help you with pay and tax for your nanny.
You also have unlimited access to our comprehensive Tinies legal advice helpline. Clear and readily accessible legal advice is a key element in keeping employment on the right track and preventing a breakdown in communication.
Nanny payroll provided by Nannytax or Nanny Matters
At Tinies we work closely with two specialist childcare payroll companies.
They can provide you with a fully comprehensive nanny payroll service, as well as advice and full legal support relating to the employment and pay of your nanny.
Tinies recommends these childcare payroll companies:
- Nannytax on 020 3137 4401 or [email protected]
- Nanny Matters on 01275 464 425 or [email protected]
Nanny payroll calculator
Use Nannytax's payroll calculator to help you work out the difference between "net" and the actual "total" cost to you as an employer of a nanny.
