There are various responsibilities that employers must fulfil when hiring a nanny, mothers help or nanny housekeeper. It is important to remember that the above are NOT normally considered to be self employed.
- It is the nanny employer's responsibility to pay liabilities (tax and NI) based on their gross salary.
- Employer’s Liability Insurance must be in place
- An employment contract should be in place agreed by both parties
- A pension scheme must be offered (auto enrolment). See notes below
The payroll can be run by an outside company and this makes the whole process much easier and straightforward. We recommend Nannytax, there are other companies that also offer this and please do ask for advice.
Automatic Enrolment – Pensions
THIS IS ESSENTIAL READING IF YOU EITHER EMPLOY A NANNY OR ARE A NANNY!
WHAT IS AUTO ENROLMENT?
This is a government introduced scheme and the aim is to help workers save for their retirement. It is becoming a legal requirement for employers to ensure they have a pension available for their employees.
Who will be affected
All employers will be affected as they will have to enrol their workers in a pension scheme or make sure one is available. If the employee is over the age of 22, below the state pension age and earning above the tax free allowance (currently set at £10,000 +PA) then the employee will be considered to be an eligible jobholder. Unless the nanny has chosen (and not been asked to) opt out the employer, the nanny and the government will all make a contribution to the nanny’s pension.
What happens if the employer does not comply
If employers do not comply when they should have done so they may be liable to a fixed fine of £400 PLUS a daily fine of £50 for every day they have been non-compliant.
Can you ask your nanny to opt out of the scheme
It is against the law to ask your nanny to opt out of the scheme – this is called inducement and carries a heavy fine if caught.
Can the nanny opt out
It is possible for the nanny to opt out if it is completely their decision and it has not been suggested to them. To do this they have to opt in first to prove it has been offered to them and they can then choose to opt out.
How much will this cost
It is very important to remember that this will all be calculated based on the employee’s GROSS salary. If your nanny is eligible then it will be a requirement to pay a percentage of the gross salary into his/her pension pot. These percentages are being gradually increased over the next three years. See table at bottom.
It is therefore very important that the nanny’s contract is based upon a gross salary rather than net. The nanny’s contribution will then be paid out of her gross salary so the employer will only pay for their own contribution. If the salary is calculated on a net basis then the employer may well then end up paying for the nanny’s contribution as well.
When does this change come into effect
For small employers, this is being introduced in stages from 1 June 2015 onwards – the latest possible date being some time in 2017. Your ‘staging date’ for this purpose is set by the Pensions Regulator and would depend on your employers’ PAYE reference.
To find out more details and to find out your "staging date" you can use the online tool on the www.gov.uk website.
HAVING AN AU PAIR
If you are thinking of having an au pair to stay with you, it is important that you have adequate home and car insurance. We advise that your home insurance company is told. If you are wanting your au pair to drive your car whilst in the UK you must make sure that you have adequate car insurance and that your no claims bonus is protected. You must show the au pair, if they are required to drive the insurance cover that you have taken out for them.
Always take the au pair out in the car, if he/she is driving for you, and make sure that he/she is completely happy about driving on the left before they take your children out. It is sometimes better to arrange for the au pair to have a couple of lessons at the beginning.
They are to be included in family life, must have their own free time and they must also have time when they can attend a local language school, this not only will help their English but is a good way for them to meet new friends. The au pair MUST have their own bedroom. Their privacy is just as important as the families' privacy and must be respected. It may take some time for an au pair to settle into your family, so encouragement will be needed at all times- with the language and also making "friends" with your children. It is sometimes easier to write down duties for the au pair as well as explaining what you are wanting her / him to do each day. Their English will improve fast as they are immersed into family life.
The au pairs are here to help with childcare and light house work.
The holidays for an au pair are 28 days holiday per 12 month period, including Public Holidays. Pocket money will be paid during this time. The Au Pair should not be forced to take holiday at the same time as the family. Holidays should be mutually agreed between host family and Au Pair.
Remember that having an au pair is “another pair of hands”