#DontIgnoreIt

Advice from Fulham Nannies℠ London nanny agency

Many parents employing a nanny are still unaware about the introduction of the nanny pension auto-enrolment which is presently being phased in. Nannies who are aged between 22 and the State Pension Age earning above the current £10,000 Tax Free Allowance will need to be enrolled.

Nannies are employed workers so of course they should be entitled to the benefits that all other employees receive. However, families who employ a nanny are micro employers, and not huge employers or even small businesses. Therefore, this news is likely to be unwelcome by some nanny employers, but it need not be as much of an issue as it may seem at first glance.

Nannytax are probably the biggest and most well-known payroll company who deal with all matters concerning nannies taxation, and they are well prepared to support our families through these changes, and give sound advice about what the costs of employing a nanny will mean with this introduction, and take care of all the required paperwork for parents employing a nanny already or are considering employing a nanny.

There is a lot that can be done to help nanny employers manage these requirements. For instance, the percentage contribution doesn't have to be paid on the whole salary. It can be paid on something called 'Qualifying Earnings' (sometimes called 'Banded Earnings') which will be less expensive for the employer.

Once again we see another reason to agree a Gross salary with your nanny as opposed to a net salary according to Nannytax. However, if you have agreed a Net salary with your nanny you will be responsible for paying in both the employer contribution and the nanny contribution. That means you would eventually be paying an extra 7% of your nannies salary!

For some nanny employers an extra £350 to £500 per annum may not be a show-stopper, but for others who have perhaps only managed to afford the costs of employing a nanny through a combination of nanny sharing and Ofsted vouchers, this may be more of a concern.

Nonetheless, if you're happy with the flexible personal service through having a nanny and it's worked well for you, then this need not be a reason to give up. At Fulham Nannies℠ we tend to suggest talking to a reputable payroll company, such as NannyTax or Way2paye, and find out what you can do to comply and lessen any impact of the costs of employing a nanny. A good nanny is an investment and soon nanny pensions will be as familiar as, say, statutory holiday entitlement for nannies, paying their tax, and using a work contract. The alternative - not paying into the nannies pension fund, carries penalties that will cost more than the nanny cost of the pension contribution percentage, and devalues your nanny.