Hiring a nanny changes your status from being a parent to being a parent and an employer. This means you will need to meet all of the obligations of being an employer. This includes organising nanny tax payslips, national insurance, and providing a pension plan for your nanny.
What Legal Obligations Do I Have When I Employ a Nanny?
While there are many obligations when you employ a nanny, we have created a shortlist of the most important ones you must adhere to. Here are the most important obligations:
UK Check – Right To Work
Your first obligation is to make sure your prospective nanny has the legal right to be employed in the UK. Ask the nanny for their identification. This can include their passport, an ID card, or birth certificate. You must review these documents before formally offering employment.
Tax Contributions – The Governments Share
You will need to contact HM Revenue and Customs when you hire your nanny to setup your PAYE plan. Remember, you must deduct your nanny’s income taxes and submit them immediately.
You are responsible for keeping records of income tax payments both for your records and for your nanny.
National Insurance Contributions – Keeping Everyone Healthy
You need to factor in your nanny’s requirements for national insurance contributions. The amount is determined as a percentage of her pay. As the employer, you need to deduct the contribution and submit the payments, based on your nanny’s salary, if she earns above the threshold.
Liability Insurance – Protecting Yourself
You need to have liability insurance in case your nanny becomes ill or is injured when she is doing her duty as a nanny. Your existing policy for your home may cover this, but take the time to check. You will most likely need to add an employer’s liability policy.
Employment Contract – Defining The Terms of Employment
You are required to provide your nanny with a written contract outlining the duties, pay, and benefits. It is recommended you do this before she starts the job, but you are required to present her with the contract before she has worked two months.
If you decide to make any changes in the future, the changes need to be documented and approved by both you and the nanny.
Payslip – Payment Verification
You need to give your nanny a payslip for every pay period, whether that is weekly or monthly. It must include details about her earnings and all deductions that were made.
National Minimum Wage – Fair Salary
You are probably planning to pay your nanny more than the minimum wage. It is required by law that you pay her at least the minimum.
Common rates for live-in nannies are £300 to £350 weekly. Day nannies are usually paid a little higher since they do not receive live-in benefits. Their rates range between £400 and £475 weekly. Your nanny may expect a higher salary if they are experienced, provide added skills, or have advanced qualifications. If you expect your nanny to fulfil other household duties, expect to pay a little more, too.
Paid Annual Leave – Time For a Break
Every employee, including nannies, are guaranteed 5.6 weeks of annual leave. For part-time nannies, this is figured as the equivalent of their weekly work hours. You need to determine if you will include bank holidays or not.
You should discuss holiday periods with your nanny in advance, so both of you are satisfied with the arrangement.
Pension – Planning For The Future
If you nanny earns over £10,000 annually and is between 22 years old and retirement age, you need to provide a pension scheme. You are responsible for making a contribution to her pension scheme monthly The amount is based on her gross salary.
Notice of Termination of Employment – When Things Don’t Work Out
When things don’t work out as planned for either you or your nanny, you must give provide notice of termination. If it is during her first month of work, a one week notice is adequate from either you or your nanny. After the first month, a full month’s notice is expected. If you want a longer or shorter notice, it should be discussed and agreed to by both parties. The notice period should be explained in her employment contract.
Maximum Working Hours – Staying Under the Limits
Have you heard of the working time directive? It states that you cannot insist on your employee work over 48 hours each week.
Nannies over 18 years old can agree to work additional hours if you both agree to the arrangement and sign an agreement. This is one area your nanny is in charge. You cannot insist she sign the agreement, and she has the choice to rescind the agreement at any time by providing a one week notice.
Statutory Maternity Rights – When Motherhood Comes to Call
Nannies are entitled to maternity leave like any other employee. If she gets pregnant, you are required to provide leave.
Do You Need Help Sorting This Out?
If you are not sure how to handle all of these new obligations, there is help available. Contact one of the companies who can take care of running your payroll, paying the taxes and insurance, and some even take care of the pension services, too. You don’t have to do it alone.