If you employ Nanny etc. in the UK you have the same legal responsibilities as a commercial employer and the law requires you to:
- Register as an employer
- Set up and operate a PAYE (Pay As You Earn) scheme on your nanny’s behalf
- Keep tax records on her behalf
- Provide your nanny with regular payslips
- Provide her with an employment contract
- Pay regular income tax and National Insurance Contributions
- Pay employer’s National Insurance Contributions
- File an employer’s annual tax return
These obligations also apply:
- In short-term employment (i.e. a week or longer)
- To any employment taking place in the UK – irrespective of the country of origin of the nanny or employer
Failure to register as an employer if you are paying your nanny above the weekly threshold is an offence, which can potentially lead to heavy penalties and career-damaging publicity.
Statutory Sick Pay (SSP)
Just like any other employee, when a nanny is absent from work due to sickness their employer is required to administer Statutory Sick Pay (SSP).
The current rate is £89.35 per week. It’s paid by employers for up to 28 weeks.
When SSP is due
SSP is paid for the days the nanny would normally have worked. It is not paid for the first four consecutive days of illness (excluding days not normally worked). These four days are known as ‘waiting days’ and any payment of salary to the nanny for these days is at the employer’s discretion. On the fourth consecutive day, SSP is paid instead of, or as part of, the nanny’s normal rate of pay, for up to 28 weeks.
Nannies who have jobs with more than one family may get SSP from each employer.
How it is paid
SSP is paid in the same way as the nanny’s normal salary (weekly or monthly), a payslip is provided as normal and Tax and National Insurance will be deducted in the usual way.
Who can and cannot qualify
To qualify nannies must:
- be classed as an employee and have done some work for their employer
- have been ill for at least 4 days in a row (including non-working days)
- be earning at least the Lower Earnings Limit
- inform their employer within 7 days or by their employer’s deadline (if they have one stipulated in the Employment Contract)
Nannies cannot qualify if:
- they have received the maximum amount of SSP (28 weeks)
- have taken 3 years or more ‘linked periods’ of sickness – where 4 or more days of sickness happen within 8 weeks of each other
- are getting Statutory Maternity Pay
Changes to the law from 6 April 2014
From the start of the tax year 2014/15, The Percentage Threshold Scheme (PTS) which allowed employers to recover SSP in certain circumstances has been abolished. Employers will no longer be to reclaim SSP although recovery of unclaimed SSP for previous tax years may be possible for a limited period. In replacement of the PTS, the government have announced they will be moving the funding into a new scheme as part of the cross-government Health, Work and Wellbeing Initiative. Under this new scheme, help will be made available to employees who have been incapacitated for four weeks or more in order to help them to get them back to work.
Statutory Maternity Pay (SMP)
The 2016-17 rate of SMP
The first 6 weeks of SMP are paid at 90% of average gross weekly earnings. The remaining weeks of the maternity pay period (up to a maximum of 33 weeks) are paid at the rate of £139.58 gross per week, or 90% of average gross weekly earnings, whichever is lower.
See Rates & Thresholds for all current government rates.
Shared Parental Leave Pay (SPLP)
2016-17 Shared Parental Leave Pay
This is based on the salary of the parent who is on leave. The first 6 weeks of the person on leave are paid at 90% of his or her average gross weekly earnings. The remaining 33 weeks of paid leave are paid at the rate of £139.58 gross per week or 90% of that person’s average gross weekly earnings, whichever is lower.
See Rates & Thresholds for all current government rates.
New fathers are entitled to two weeks’ SPP, with a right to a further 13 weeks of unpaid leave. The current rate is £128.73
Statutory Adoption Pay (SAP)
Statutory Adoption Pay (SAP) for employees is:
- 90% of their gross average weekly earnings for the first 6 weeks
- £140.98 a week or 90% of their gross average weekly earnings (whichever is lower) for the next 33 weeks
Tax and National Insurance need to be deducted.
Redundancy Pay entitlement
This is dependent on age and the length of time in employment with that family. The table below shows the current rates, also on our Rates & Thresholds page:
|Age 18-21||Half a week’s pay or £237.50, whichever is lower|
|Age 22-40||One week’s pay or £479, whichever is lower|
|Age 42-retirement||One and a half week’s pay or £718.50, whichever is lower|
For those who have been in long-term employment with the same family, it is not always a straightforward calculation. The amount owed is calculated by the age the nanny was during the corresponding period of time and the statutory amount for that age. Nanny is entitled to 1 weeks pay for each complete year of service after 2 years in the same employment.
Being on PAYE, a nanny is legally entitled to these amounts; however, the employer is free to pay more than the statutory minimum. No part of the costs can be claimed back from the state and the nanny does not have to pay tax on redundancy payments up to £30,000.
National Minimum Wage (NMW)
Current NMW Rates
NMW rates are updated by the government every October. Please see our Rates & Thresholds page for all current government rates.
|Age 16-17||£3.87 gross per hour|
|Age 18-20||£5.30 gross per hour|
|Age 21-24||£6.70 gross per hour|
|Age 25+||£7.20 gross per hour|
|Offset Allowance||£37.45 per 7-day week|
Almost all workers are entitled to by law to receive the National Minimum Wage and it is a criminal offence to pay below the current hourly rate (except for exemptions). If caught paying below the National Minimum Wage, the employer could incur substantial fines. The hourly rate depends on the employee’s age.
Nannies who are exempt
Live-in nannies are exempt provided she lives as part of the family household, is treated as a member of the family and is not provided with separate accommodation. For employers who provide separate accommodation for their employees, there is an allowance per 7-day week, which can be offset against the minimum hourly rate.
The Working Time Directive
Domestic employees, including nannies, are exempt from the measures concerning working hours but are entitled to a 20-minute rest break for every six hours worked.