If you decide to hire the services of a nanny to look after your child, you automatically turn into an employer. In the role of an employer, there are certain obligations you need to meet which includes paying tax, providing the nanny with a pension, along with national insurance.
What Are Your Legal Obligations as an Employer?
There are a number of obligations that you are required to comply with when you hire a nanny. Here are the more important ones:
1. Check the Right to Work in the UK
You first need to ensure that the nanny you plan to hire is allowed to work within the UK legally. You should check on the applicant’s documents that prove their identification such as an identity card, birth certificate, or passport before you provide this individual with an offer that is formal of employment.
2. Tax Contributions
You hold the responsibility of first deducting and then paying the income-tax contributions for your nanny. You will need to contact Customs and HM Revenue so that you can register yourself as an employer and then set up the PAYE scheme.
You are also required to maintain records involving any payments you make for the nanny and yourself.
3. National Insurance Contributions
You are also responsible for first deducting and then paying for national insurance contributions on behalf of your nanny. This becomes payable from the salary of your nanny when she is earning over a specified threshold. Contributions from your nanny and you are calculated according to a percentage of what she earns.
4. Liability Insurance
You will also need to apply for employer’s liability insurance, and this covers you when and if your nanny is injured or becomes ill which occurs while she is at work for you. You might already have coverage from an insurance policy that you already hold, yet it is always important to check carefully.
5. Employment Contract
It is important that you have issued a contract in writing to the nanny before she begins working for you, or at least 2 months from the date that she started. This contract needs to include the salary, holiday entitlement, her hours and a comprehensive list of the duties you expect from her.
If details about this contract change in any way, it needs to be agreed upon by the nanny and yourself.
You are required to provide your nanny with a payslip every week or every month, and it must show what she earns and the deductions that were made.
7. National Minimum Wage
You are required to pay a nanny the set minimum wage. However, for many people, they often pay a lot more.
The live-in nannies usually charge around £300 to £350 per week. While the day nannies charge a slightly higher rate which works out to about £400 and £475. Keep in mind that most nannies will set their own salary expectation which is usually based on their skills, qualifications, experience, and the duties that are required of them.
8. Paid Annual Leave
Every employee regardless of whether they are part-time or full-time is entitled to 5.6 weeks of annual leave. You have the choice whether or not to include the bank holidays with this allowance.
You should be open to negotiating these holiday periods.
If the nanny you have hired is between the age of 22 and the “state” retirement age where she is earning over £10,000 a year, then you are required to register for a pension-scheme on her behalf. You will need to make monthly contributions towards this scheme, according to her gross salary.
10. Giving Notice for the Termination of Employment
Over the 1st month of the nanny’s employment, your nanny or you need to provide 1 weeks notice when it comes to terminating the employment contract. After the 1st month has elapsed, a months notice is required, yet you are able to negotiate this with the nanny. The notice period must be present in the contract.
11. Maximum Working Hours
You cannot force a nanny to work over 48 hours a week. This is a law known as the “working time directive”.
If the nanny you have hired is older than 18, she is permitted to work over 48 hours every week, provided you have signed an agreement with her. However, you cannot insist that she signs this agreement, and she is permitted to change her decision, provided she has given you 1-week notice.
12. Statutory Maternity Rights
If the nanny you have hired becomes pregnant over the duration of her employment with you, she becomes eligible for maternity leave.
If you feel a bit overwhelmed on where, to begin with, these responsibilities, don’t worry there is assistance you can obtain. There are many businesses that specialise in running payrolls on your behalf and also make paying national insurance and tax contributions just about painless. UK nanny payroll services are very easy to find and use. There are also some companies that provide pension services.