Nanny Payroll & Legal Obligations

Employing a nanny in the UK carries with it legal responsibilities, which parents must meet. If you are becoming an employer for the first time we appreciate that meeting such obligations can be daunting.

Your obligations will include:

PAYE (Pay as you earn)

Parents who employ a nanny have a legal responsibility to meet all the PAYE obligations, not meeting such obligations carry serious penalties for none compliance.

All parents must do the following when employing and paying a nanny:

  • Register yourself as an employer with the Inland Revenue.
  • Keep complete payroll records on all payments made to your nanny.
  • Provide your nanny with a payslip - Showing tax and NI deductions you have made on his/ her behalf.
  • Process a P45 every time a nanny joins or leaves you.
  • Provide your nanny with a P60 annually.
  • You will be required to complete a P35 employer's annual return detailing all payments, which must be returned to the Inland Revenue.

There are payroll companies that are set up to do this, such as Nanny Tax for a small charge.

Nanny Tax

For information & advice on how to pay your nanny, with a tax and NI calculator visit the NannyTax website http://www.nannytax.co.uk/

Contracts

A contract is a legally binding agreement between you and your nanny. As an employer you are expected to provide your nanny with a written contract, within the first 8 weeks of employment. However, Caring Services recommends that a contract be issued to the nanny before she/he starts work, so that the nanny is clear about his/her responsibilities on their first day of employment.

In the contract you must clearly state the terms and conditions of employment, clearly stating all aspects of their job. Caring Services recommends that you discuss the details of the contract with your nanny before he/she starts, to ensure that you and your nanny are in agreement of the content and, should any amendments be required, give yourself plenty of time to negotiate, amend or accommodate any changes. At Caring Services, we can help you with finding the right sort of contract for your nanny

Insurance

All employers are required to have employer's liability insurance. This will protect you as an employer against any legal costs resulting from any accident or injury your nanny may suffer whilst working in your home.

If you require your nanny to drive the family car as part of her job as a nanny, then you will need to ensure that your nanny is a named "business driver" on the car insurance.