Nanny Jobs |  Find a Nanny |  Nanny Tax


HOME HOME | CONTACT US CONTACT US | REQUEST AN INFO PACK | PAYMENT METHODS

Nanny Jobs and Tax, Find a Nanny
Nannywage Ltd Automatic Enrolment Pensions
in association with NEST
Four professional companies operating as one. Highly experienced in all aspects of employing a nanny

Agreeing a Gross or Net Salary

Having decided to employ a nanny, you have interviewed several candidates and made a final choice, now the question of are you going to pay the nanny a fixed Net wage (take home wage) or a fixed Gross wage (wage before Tax & NIC deductions) arises.

Many nannies request an agreed Net salary (take home pay) and others are happy to agree a Gross salary.

It is important that as the employer you are fully aware of the consequences of both choices.

Net Salary

Many nannies like to agree a fixed net salary, (take home wage) this means that you as the employer will pay the nanny a fixed amount of net pay (take home wage).

You are now responsible for ADDING to the agreed Net wage the Tax & NIC due to bring the wage to a Gross format and then each quarter period forward the Tax & NIC to HMRC.

The drawback to agreeing a fixed net wage is that the amount of Tax & NIC added onto the net wage to bring it to a gross format is like all Tax & NIC subject to change, either by direct government policy of raising tax thresholds or HMRC sending a tax code allowance change.

If the Tax & NIC increases due to these variations the increase is added onto the agreed fixed net wage to bring the salary to Gross format and you the employer end up paying more Tax & NIC to HMRC increasing your employment salary costs.

It must also be remembered that the current employment situation of the nanny must be taken into account, if this is second employment position then basic rate tax applies, meaning that secondary earnings are taxed with no tax free earnings, thus increasing the Tax & NIC due which is added to the agreed fixed net increasing your costs.

For example: (These figures are to make the example clear and do not represent actual deductions)

Agreed net wage is £200 per week Tax & NIC £50 per week Total salary cost to you £250
TAX or NIC rises due to government policy or adverse change to tax code allowance of employee, resulting in a total Tax & NIC rise to £75 per week
Agreed net wage is £200 per week Tax & NIC £75 per week Total salary cost to you £275

Gross Salary

Most of the working population accept that with a job vacancy, the advertised salary is a Gross salary. This means that the employer DEDUCTS Tax & NIC from the gross salary and pays the employee the net (take home wage).

The advantage of agreeing a Gross salary with your nanny is that you always know the maximum amount you will pay in a fixed Gross salary as Tax & NIC is deducted from gross and any increase in Tax & NIC results in a reduced net (take home wage) to the Nanny.

For example: (These figures are to make the example clear and do not represent actual deductions)

Agreed Gross wage is £200 per week Tax & NIC £50 per week Total net paid to the nanny £150
TAX or NIC rises due to government policy or adverse change to tax code allowance of employee, resulting in a total Tax & NIC rise to £75 per week.
Agreed net wage is £200 per week Tax & NIC £75 per week Total salary cost to you £175

To conclude: an agreed fixed Net wage will add to your overall costs if Tax & NIC rises, an agreed fixed Gross wage will reduce the net paid to a nanny and your gross costs will remain the same

We at Nannywage Ltd feel that it is our duty to ensure that you are fully aware of the potential disadvantages to agreeing a net wage with the nanny. However it must also be stressed that adverse changes to Tax & NIC may never occur. At the end of the day if you really like this nanny and so do your children, but the nanny wants an agreed net wage, you must decide if you want to miss out on employing the nanny if you are against agreeing a net wage and of course you can always renegotiate a net salary should adverse conditions come into the salary equation in the future.

If you require further advice please contact us on 020 8642 5470 or e-mail info@nannywageltd.co.uk

Salary Guide 2016/17

This salary table is a guide based on normal tax code for current tax year. It does not take into account any variations in the employee circumstances apart from age as as current payroll calculations now take into consideration:

Nannywage Ltd now believe that the traditional salary guide table is now not fully representative of many employment situations.

For an exact calculation based on salary actual tax code and employment status telephone our help desk Mon – Fri 09.30 am – 5.00 pm 020 8642 5470 or e-mail us at info@nannywageltd.co.uk

We have included a broad spectrum of some salary amounts to give you an idea of normal deductions, however, we have deliberately rounded up/down estimated costs to give a degree of flexibility to your costing calculations.

 As there are many variations of thousands of different tax codes, employment status of the nanny such as is this her main job, age differentials and employer allowances.

 Total cost per pay frequency to the employer is Gross salary PLUS employer NIC

The red colour coded entries are the same NET salary amounts but No Employer NIC as nanny under 21 years of age:

WEEKLY SALARY
Net PayTaxNIGrossEmpNI
150 00 150.00 0
150 00 150.00 0
200 0 6.00 206.00 7.00
200 0 6.00 206.00 0
250 13.00 15.00 278.00 17.00
250 13.00 15.00 278.00 0
300 28.00 24.00 352.00 27.00
300 28.00 24.00 352.00 0
350 42.00 33.00 425.00 37.00
350 42.00 33.00 425.00 0
400 57.00 41.00 498.00 49.00
400 57.00 41.00 498.00 0
450 72.00 50.00 572.00 57.00
450 72.00 50.00 572.00 0
500 86.00 59.00 645.00 67.00
500 86.00 59.00 645.00 0
MONTHLY SALARY
NetPayTaxNIGrossEmpNI
550 00 600.000
550 00 600.000
1000 8.00 46.00 1054.00 52.00
1000 8.00 46.00 1054.00 0
1250 82.00 90.00 1422.00 102.00
1250 82.00 90.00 1422.00 0
1500 155.00 133.00 1788.00 153.00
1500 155.00 133.00 1788.00 0
1750 230.00 178.00 2158.00 204.00
1750 230.00 178.00 2158.00 0
2000 302.00 222.00 2524.00 255.00
2000 302.00 222.00 2524.00 0
2250 376.00 222.00 2892.00 305.00
2250 376.00 266.00 2892.00 0
2500 449.00 310.00 3259.00 357.00
2500 449.00 310.00 3259.00 0

All contents © copyright 2007 Nannywage Ltd | webdesign artdivision