Always agree a gross wage
Nannies speak in net terms…..
Employers speak in gross terms…..
Always agree a gross wage. If you agree a fixed net salary you are committing yourself to paying all of your employee’s income tax and NI to make up their gross wage, irrespective of their individual tax code or tax position. (This can be a costly mistake for both).
Nannies and parents often agree a net salary (i.e. take-home) salary with their nannies, but in reality a nanny is always paid a gross salary, with tax and National Insurance Contributions deducted and paid to HMRC. (usually quarterly) Although many employers tend to look on this as an additional cost, it is actually part of the nanny’s gross wage.
You also need to be aware that if you are employing a Nanny on a part time basis, they may be on the basic tax rate, rather than the standard tax rate, which could cost the employer more in tax.
You also need to be aware that a gross wage is not the total cost to you as an employer. In addition to this you have to pay an Employer’s National Insurance Contribution, which is not part of the employee’s gross wage.
Please do call us if you would like to fully understand the cost implications fully of employing a nanny, we are happy to help.
Tel: 0208 1500017