Legal responsibilities as an employer
If you employ a nanny you have a number of legal responsibilities as an employer.
By law, you must:
- Register as an employer
- Set up and operate a PAYE (Pay As You Earn) scheme on your nanny’s behalf
- Pay regular Income Tax and National Insurance Contributions
- Pay Employer’s National Insurance Contributions
- Keep tax records on your nanny’s behalf
- Provide your nanny with regular pay slips
- Provide your nanny with an employment contract (for permanent contracts, this must be in place within 8 weeks of the nanny starting their position)
- File an employer’s annual tax return
- Have employer’s liability insurance in place
- Enrol eligible employees into a qualifying pension scheme
PAYE and National Insurance contributions
It is your responsibility to register to pay PAYE and National Insurance Contributions on your nanny’s behalf. If you cut corners by either not registering for PAYE / or registering and only part declaring your nanny’s salary to save yourself money – you are committing a criminal offence and may receive a substantial fine. In addition, these payments count towards your nanny’s entitlement to Statutory Sick Pay, Statutory Maternity Pay, unemployment and state pension benefits. Your nanny will also need an accurate record of their pay when applying for a loan or mortgage.
If this all sounds a bit daunting, help is at hand. There are a number of nanny payroll providers who can help below.