Useful Information When Employing a Nanny
Posted on 2nd May 2019
There is a lot to think about when it comes to employing a nanny. In this article, I will go over the main things you may need guidance on when writing your nanny’s contract.
Nannies tend to talk in Net, which is their take home wage. Rosebud Nanny Agency (and payroll companies) strongly advise you agree the salary in Gross terms – agreeing a Net wage means you as the employer are responsible for paying any and all tax due by the nanny, so if she has another job (using her tax free allowance), a student loan, or an old employer has underpaid tax, you will have a hefty bill. If you agree a Gross wage, you will always know exactly what you are paying, with no nasty surprises!
The nanny’s gross salary includes her tax and National Insurance contributions. On top of this, you may be liable for employers NI contributions. This will vary depending on your nanny’s salary – a really helpful calculator can be found here – https://www.nannytax.co.uk/calculators/gross-to-total-cost.
It is advised that you have a probationary period written into your nanny’s contract – this is usually 3 months (with the option to extend to 6 months). This has a shorter notice period, typically one week to either employer or employee. Once you reach the end of the probationary period, you should schedule a meeting with your nanny and discuss how you both feel she is doing – has she bonded with the children? Is she enjoying the role? Do you feel she is performing well? If there are any issues, or anything minor you feel could be worked on, this is the time to talk it through (and if suitable, set a time limit to see a change/improvement, and extend the probationary period). If at this point you are very happy with your nanny, take this opportunity to tell her so! It’s nice to feel appreciated.
Once the nanny has successfully completed the probationary period, the notice period will extend – this can be flexible to suit you, but the norm is 4 or 6 weeks written notice either side.
Expenses and other costs
For everyday expenses, e.g. entrance to toddler groups and soft play centres, it is advisable to have a kitty for the nanny to help herself. She should keep a daily diary, where she will explain all costs (e.g. Thursday morning, toddlers, £1) and she should also keep note of any mileage. If she uses her own car for work, you will need to pay a mileage allowance for all journeys she undertakes for work – school runs, trips – but not her commute to and from work. The AA recommend paying 45ppm.
A full time nanny is entitled to 5.6 weeks (28 days) paid annual leave. This includes bank holidays, so usually the nanny has around 4 weeks left. The standard practice is for you to dictate two of her 4 weeks off, to coincide with when you wish to take your family holiday, and she chooses two weeks herself. She does need to give you notice, and check the dates suit you before she books. If the dates she requires are not possible for you, try to compromise. Usually the nanny cannot take more than 2 weeks at a time.
For nannies that work part time, she is entitled to a pro rata amount of holiday – eg, if she works 3 days per week, she would get 3/5ths of the 28 days – 17 days. If your nanny works varied hours (eg an after school nanny who works full days in the school holidays) her holiday entitlement will be worked out in hours. A good holiday calculator can be found here – https://www.gov.uk/calculate-your-holiday-entitlement
Sick Pay and Maternity Pay
As with any other employee, your nanny is entitled to Statutory Sick Pay (SSP) and Statutory maternity Pay (SMP).
Statutory Sick Pay
SSP kicks in on the fourth (working) day of illness. The first 3 (working) days the nanny takes off work are paid at your discretion. These are known as the ‘waiting days’. SSP is only paid for her usual days of work – for example, if your nanny only works Mondays, the first 3 weeks would be her 3 waiting days – 3 Mondays. So SSP would kick in on the 4th Monday.
SSP is paid from day 4 for up to 28 weeks, and the rate for 2015-2016 is £88.45 per week.
To qualify, your nanny must earn at least £112 per week.
Statutory Maternity Pay
As a Nanny employer, you can claim back the costs of SMP.
To qualify for SMP, the nanny must earn more than £111 per week, and must have been working for you for more than 26 weeks by the qualifying week of her pregnancy (15 weeks before due date).
The first six weeks of her maternity leave are paid at 90% of her gross wage, and the remaining 33 weeks are paid at SMP or her normal salary, whichever is lower. At the time of writing, SMP is £139.58 per week.
All Nannies aged between 22 and the state pension age (who earn more than £10,000 per year) will be automatically enrolled into the new pension scheme. If she is part time, she will not be automatically enrolled but you will still need to set up a pension for her to join if she wishes.
Once your nanny is enrolled, she can choose to opt out.
Pensions are very new for nannies, so are being introduced gradually. Any nanny who has started employment at the end of 2015 will need to have a pension scheme set up by October 2017. Your payroll company will advise you when the time comes.
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