What You Really Need To Know About Nanny Tax

are considering hiring a nanny to care for your children3. An Employer's National Insurance Contribution
then there are a few important considerations about• When to pay - If your nanny is earning over £97
nanny tax which you need to take into account. Readper week you have a legal obligation to pay national
on to find out more.insurance contributions, income tax and an
When it comes to hiring a nanny one of the mostemployer’s national insurance contribution. You
important considerations will be the expense. Whilstmust set up and operate a PAYE scheme, keep a
having a nanny may seem like the best solution topayroll, produce yearly accounts of all payments and
your childcare needs, if you cannot meet the monthlydeclare your nanny’s wage to the Inland
expense it is an option which quickly becomes invalid.Revenue.
You would be forgiven for initially thinking that the• What happens if you don’t pay —
weekly expense quoted in most of the articles andAs paying nanny tax and national insurance
advice you find about nanny hire represents thecontributions is a legal requirement, you are breaking
amount of money you need to budget for. In fact,the law if you fail to do so. The consequence of not
most of the information out there discusses net wagepaying nanny tax may be a hefty fine.
and fails to mention that as the parent of the child you• How to go about paying — The first step to
also have to pay tax on top of the usual quoted figure.sorting out your nanny tax is to register as an
So what do you need to know about this nanny tax?employer at the tax office. Then many people choose
• What you need to pay — When you hire ato hire the services of a specialist payroll service to
full-time nanny you will need to pay the following:sort out the PAYE scheme, national insurance
1. National Insurance Contributionscontributions and also provide them with invaluable
2. Income taxemployment advice.