When a parent advertises for a "sole charge" nanny they mean that the nanny will be responsible for the children's care on their own, not with mum or dad around at home. This is typical of a nanny job where the nanny is working for a family in which both parents have full-time jobs.
However even when a nanny job is advertised as being "sole charge", there may be times when a parent comes home from work early or works from home. In a "sole charge" nanny job such occasions would be rare rather than the norm.
Where a parent works from home, they may consider the nannies job as being "sole charge" as when working the parent is not available to respond to the children. Nannies taking on this kind of job should check with the parent as to where the parent will actually be working, as if they are working in the same building as the nanny is providing childcare, then the children may feel that mum/dad is contactable... even if mum/dad feel they are not. If a child cries then mum/dad may naturally want to respond to their child's cry - it can be very hard for a parent working from home to totally isolate themselves from their children, physically and emotionally.
Wednesday 24 June 2009
Tuesday 23 June 2009
UK: How does taxation work when a nanny has two jobs?
When a nanny has two jobs, I feel the easiest way of doing taxation is for one job to be classed as the Primary job and the other job to be classed as secondary.
The primary job should be the one in which the nanny earns the most salary ideally, though it doesn't really matter as long as the salary is above the personal tax free allowance.
Employers of nannies should be agreeing Gross salaries, as is the situation in any other line of work.
An example of how it works for a nanny with two jobs:
Nanny working 10 hours per day, 3 days per week, being paid £10 gross per hour. No Student Loan Deductions, or any other special case such as being married or being a widow.
To help keep things simple: employees start date is 6 April 2009 and assuming that this is the nannies first job, so we have no tax to date to deal with.
Based on information in P49 for when no P45 is presented, persons only job, initial taxcode: 647L cumulative NICs Category A
Weekly Gross Pay: £300
Week 1
Earnings at the LEL (where earnings are equal to or exceed the LEL) £95
Earnings above the LE, up to and including the ET £15
Earnings above the ET, up to and including the UAP £190
Earnings above the UAP, up to and including the UEL £0
Total of employee's and employer's contributions £45.33
Employee's contributions due on all earnings above the ET £20.95
Employer's Contributions £24.38
Paydate: 10 April
The Col references below are for the PAYE form P11.
Col 2: 300, Col3: 300, Col 4a: 124.61, Col 5: 175.39, Col 6: 35, Col 7:35
Gross Pay £300
Employee NICs £20.95
Employee Tax £35
NET PAY £244.05
Employer's NICs £24.38
Total cost to the employer: £324.38 (Gross Pay + Employer's NICs)
Total payment to HMRC: £80.33
In Week 3 the nanny takes on another job. To keep the figures as similar as possible, will use 20 working hours at the higher pay rate of £15 per hour.
Thus in Job2 this nanny is working 20 hours at £15 per hour, thus earning £300 per week. BOX C on P46 has been ticked, so tax code is BR cumulative
Week 3 – Job2
Earnings at the LEL (where earnings are equal to or exceed the LEL) £95
Earnings above the LE, up to and including the ET £15
Earnings above the ET, up to and including the UAP £190
Earnings above the UAP, up to and including the UEL £0
Total of employee's and employer's contributions £45.33
Employee's contributions due on all earnings above the ET £20.95
Employer's Contributions £24.38
Paydate: 24 April
The Col references below are for the PAYE form P11.
Col 2: 300, Col3: 300, Col 6: 60, Col 7:60
Gross Pay £300
Employee NICs £20.95
Employee Tax £60
NET PAY £219.05
Employer's NICs £24.38
Total cost to the employer: £324.38 (Gross Pay + Employer's NICs)
Total payment to HMRC: £105.33
From this example you can see that the cost to the employer is the same £324.38
The amount paid to HMRC is different. The amount paid to the nanny is different.
In the example above, the second job is the same Gross Salary which makes it easier for us to be able to compare it with the primary job. In reality I would not expect the second job to be the same gross salary, though it is possible that it may happen.
In the second job, as the primary job is using all of the nannies tax free personal allowance, all of the income is taxed. This means that the amount deducted by the employer for the employees tax is higher. This is passed to HMRC by the employer, on the nannies behalf. As the gross pay amount is the same, the National Insurance Contributions are the same. As the gross pay amount is the same, each employer pays the same Employers National Insurance Contributions.
Employers of nannies SHOULD ALWAYS agree a Gross salary, not Net (take home pay). Agreeing a Net salary is very old fashioned in my view and will cause you as the employer grief in the long run, as your nannies taxcode can change during their time in your employment, plus tax rates can also change. As you can see from the example above, it does not matter if you are able to use any of the nannies personal tax allowance or not... the cost to you as the employer is the same regardless. The difference comes in the amount of tax you deduct from your nannies salary and pass on to HMRC.
This was prepared on 23 June 2009. Due to the way taxs work in the UK the figures in this calculation will be outdated at the next tax change (probably April 2010). However the principle remains the same.
The primary job should be the one in which the nanny earns the most salary ideally, though it doesn't really matter as long as the salary is above the personal tax free allowance.
Employers of nannies should be agreeing Gross salaries, as is the situation in any other line of work.
An example of how it works for a nanny with two jobs:
Nanny working 10 hours per day, 3 days per week, being paid £10 gross per hour. No Student Loan Deductions, or any other special case such as being married or being a widow.
To help keep things simple: employees start date is 6 April 2009 and assuming that this is the nannies first job, so we have no tax to date to deal with.
Based on information in P49 for when no P45 is presented, persons only job, initial taxcode: 647L cumulative NICs Category A
Weekly Gross Pay: £300
Week 1
Earnings at the LEL (where earnings are equal to or exceed the LEL) £95
Earnings above the LE, up to and including the ET £15
Earnings above the ET, up to and including the UAP £190
Earnings above the UAP, up to and including the UEL £0
Total of employee's and employer's contributions £45.33
Employee's contributions due on all earnings above the ET £20.95
Employer's Contributions £24.38
Paydate: 10 April
The Col references below are for the PAYE form P11.
Col 2: 300, Col3: 300, Col 4a: 124.61, Col 5: 175.39, Col 6: 35, Col 7:35
Gross Pay £300
Employee NICs £20.95
Employee Tax £35
NET PAY £244.05
Employer's NICs £24.38
Total cost to the employer: £324.38 (Gross Pay + Employer's NICs)
Total payment to HMRC: £80.33
In Week 3 the nanny takes on another job. To keep the figures as similar as possible, will use 20 working hours at the higher pay rate of £15 per hour.
Thus in Job2 this nanny is working 20 hours at £15 per hour, thus earning £300 per week. BOX C on P46 has been ticked, so tax code is BR cumulative
Week 3 – Job2
Earnings at the LEL (where earnings are equal to or exceed the LEL) £95
Earnings above the LE, up to and including the ET £15
Earnings above the ET, up to and including the UAP £190
Earnings above the UAP, up to and including the UEL £0
Total of employee's and employer's contributions £45.33
Employee's contributions due on all earnings above the ET £20.95
Employer's Contributions £24.38
Paydate: 24 April
The Col references below are for the PAYE form P11.
Col 2: 300, Col3: 300, Col 6: 60, Col 7:60
Gross Pay £300
Employee NICs £20.95
Employee Tax £60
NET PAY £219.05
Employer's NICs £24.38
Total cost to the employer: £324.38 (Gross Pay + Employer's NICs)
Total payment to HMRC: £105.33
From this example you can see that the cost to the employer is the same £324.38
The amount paid to HMRC is different. The amount paid to the nanny is different.
In the example above, the second job is the same Gross Salary which makes it easier for us to be able to compare it with the primary job. In reality I would not expect the second job to be the same gross salary, though it is possible that it may happen.
In the second job, as the primary job is using all of the nannies tax free personal allowance, all of the income is taxed. This means that the amount deducted by the employer for the employees tax is higher. This is passed to HMRC by the employer, on the nannies behalf. As the gross pay amount is the same, the National Insurance Contributions are the same. As the gross pay amount is the same, each employer pays the same Employers National Insurance Contributions.
Employers of nannies SHOULD ALWAYS agree a Gross salary, not Net (take home pay). Agreeing a Net salary is very old fashioned in my view and will cause you as the employer grief in the long run, as your nannies taxcode can change during their time in your employment, plus tax rates can also change. As you can see from the example above, it does not matter if you are able to use any of the nannies personal tax allowance or not... the cost to you as the employer is the same regardless. The difference comes in the amount of tax you deduct from your nannies salary and pass on to HMRC.
This was prepared on 23 June 2009. Due to the way taxs work in the UK the figures in this calculation will be outdated at the next tax change (probably April 2010). However the principle remains the same.
Tuesday 9 June 2009
How Much Annual Leave Is Your Nanny Entitled?
A Nanny working in the UK is an employee like any other and thus is entitled currently (2009) to 5.6 weeks paid annual leave.
The 5.6 weeks can include Bank Holidays / Public Holidays or you as the employer can decide to off those days off in addition to the 5.6 weeks. If you need your nanny to work Bank Holidays / Public Holidays then they do not get any additional holiday entitlement... they still get the 5.6 weeks.
If your nanny works part-time - a few days per week, then use the BusinessLink Holiday Entitlement Calculator to calculate your nannies annual leave. The 5.6 weeks leave is pro-rata for part-time employees.
You should write a term into the contract which states the amount of annual leave provided plus the amount of advance notice needed to make a request to take annual leave. As the employer you are able to deny any requests for annual leave, if it is not convenient for you but you should aim to have a good working relationship with your nanny, so I suggest that you both try to come to agreement over holidays.
If you often go away on holiday and don't need your nanny to work, then you can ask your nanny to use some of their annual leave. Typically a nanny would expect to be told when to take 2 weeks of their annual leave... leaving the nanny to choose when to take the rest. If you go on holiday a lot then there may be weeks when you have to pay your nanny even though you are on holiday. It is your choice to go on the holiday, not your employees.
If you have school aged children you may want to limit your nanny to only be able to take time off during school holidays. This is perfectly legal to do but must be discussed with your nanny prior to implementing.
Keeping your nanny happy vs getting the most work from them is a balancing act. I would suggest that you consider how you would like a great boss to treat you and then treat your nanny as best as possible.
The 5.6 weeks can include Bank Holidays / Public Holidays or you as the employer can decide to off those days off in addition to the 5.6 weeks. If you need your nanny to work Bank Holidays / Public Holidays then they do not get any additional holiday entitlement... they still get the 5.6 weeks.
If your nanny works part-time - a few days per week, then use the BusinessLink Holiday Entitlement Calculator to calculate your nannies annual leave. The 5.6 weeks leave is pro-rata for part-time employees.
You should write a term into the contract which states the amount of annual leave provided plus the amount of advance notice needed to make a request to take annual leave. As the employer you are able to deny any requests for annual leave, if it is not convenient for you but you should aim to have a good working relationship with your nanny, so I suggest that you both try to come to agreement over holidays.
If you often go away on holiday and don't need your nanny to work, then you can ask your nanny to use some of their annual leave. Typically a nanny would expect to be told when to take 2 weeks of their annual leave... leaving the nanny to choose when to take the rest. If you go on holiday a lot then there may be weeks when you have to pay your nanny even though you are on holiday. It is your choice to go on the holiday, not your employees.
If you have school aged children you may want to limit your nanny to only be able to take time off during school holidays. This is perfectly legal to do but must be discussed with your nanny prior to implementing.
Keeping your nanny happy vs getting the most work from them is a balancing act. I would suggest that you consider how you would like a great boss to treat you and then treat your nanny as best as possible.
Sunday 7 June 2009
How To Recruit A Nanny - Part 2: Nanny Agencies
Before the internet parents who wanted to employ a nanny would typically approach a Nanny Agency who would assist parents in selecting a suitable nanny.
The internet in my view has changed the way nannies are recruited. Nanny Agencies can charge from several hundred pounds to several thousand pounds. Whereas internet recruitment websites may charge less than thirty pounds.
However parents still do use nanny agencies, especially if it is the first time they are recruiting a nanny. Why? Well I suspect it is to do with having someone else provide all the necessary information and advice, plus it removes some of the hassles of finding a nanny.
A nanny agency will typically have a selection of nannies on their books who they know are looking for work. The agency will try to match the parents requirements with a suitable nanny. If none of the nannies on the agencies books meet the requirements, then the agency will advertise for nannies.
Before accepting a nanny onto the agencies books, the agency will interview the nanny and check references, training certificates, make sure the nanny has an Enhanced CRB (Criminal Record Bureau) check, plus will discuss with the nanny about what positions they feel they are suited to. For example, when I have been interviewed by nanny agencies, I like to make it clear that I prefer working with babies & toddlers. That then helps the agency in placing me with a family whom has a baby or toddler.
Agencies will check a nannies references but due to the Data Protection Act it appears that if a parent wanted a copy of the reference, the agency may not be in a position to provide that. For more information and a discussion about this see: Mumsnet: Nanny References
The agency will provide you with a short list of nannies whom you can then choose to interview. When you interview the nannies, I would suggest that you ask them to bring with them written references and provide a couple of phone numbers of families you can chat with. That way you can see their written references plus obtain verbal references for yourself. That combined with the feedback from the agency with regard to the references they checked should be sufficient to help you make the recruitment decision.
The agency is there to support you. They should be able to provide you with advice with regard to the nannies contract of employment, taxation rules (they may run their own payroll service, or will be able to provide details of one - such as PAYE for Nannies), plus provide general advice about employing a nanny.
The internet in my view has changed the way nannies are recruited. Nanny Agencies can charge from several hundred pounds to several thousand pounds. Whereas internet recruitment websites may charge less than thirty pounds.
However parents still do use nanny agencies, especially if it is the first time they are recruiting a nanny. Why? Well I suspect it is to do with having someone else provide all the necessary information and advice, plus it removes some of the hassles of finding a nanny.
A nanny agency will typically have a selection of nannies on their books who they know are looking for work. The agency will try to match the parents requirements with a suitable nanny. If none of the nannies on the agencies books meet the requirements, then the agency will advertise for nannies.
Before accepting a nanny onto the agencies books, the agency will interview the nanny and check references, training certificates, make sure the nanny has an Enhanced CRB (Criminal Record Bureau) check, plus will discuss with the nanny about what positions they feel they are suited to. For example, when I have been interviewed by nanny agencies, I like to make it clear that I prefer working with babies & toddlers. That then helps the agency in placing me with a family whom has a baby or toddler.
Agencies will check a nannies references but due to the Data Protection Act it appears that if a parent wanted a copy of the reference, the agency may not be in a position to provide that. For more information and a discussion about this see: Mumsnet: Nanny References
The agency will provide you with a short list of nannies whom you can then choose to interview. When you interview the nannies, I would suggest that you ask them to bring with them written references and provide a couple of phone numbers of families you can chat with. That way you can see their written references plus obtain verbal references for yourself. That combined with the feedback from the agency with regard to the references they checked should be sufficient to help you make the recruitment decision.
The agency is there to support you. They should be able to provide you with advice with regard to the nannies contract of employment, taxation rules (they may run their own payroll service, or will be able to provide details of one - such as PAYE for Nannies), plus provide general advice about employing a nanny.
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