Employer Responsibility

  • Nanny and household staff employers have the same legal responsibilities as commercial employers.
  • If a nanny or household staff employee earns over the Tax and NI thresholds, the employer must deduct these from her gross salary and pay these to HMRC on her behalf.
  • NI Contributions go towards state pension and statutory entitlements such as SMP, SSP and unemployment benefits.
  • Payslips are proof of earnings, required in order to apply for a bank loan or mortgage.

Tax Rates and Thresholds for 2019-20

The new Government Rates for the Tax Year 2019-20.

Tax brackets Gross per week Description
Lower Earnings Limit £118 gross per week or less If you pay your employee the LEL or below, there is nothing due to HMRC and your employee will not be entitled to any state pensions or benefits.
Bracket between Lower Earnings Limit and NI Threshold Between £118-£166 gross per week If you pay your employee between these figures there is nothing due to HMRC, however you should still register so your employee will be entitled to state pension and benefits.
Employer's (Secondary) NI Threshold £166 gross per week or more If you pay your employee £166 or more you must register and pay Employer’s NI.
Employee's (Primary) NI Threshold £166 gross per week or more If you pay your employee £166 or more you must now deduct National Insurance on behalf of your employee, as well as pay Employer’s NI.
Tax Threshold Over £240 gross per week If you pay your employee £240 or more you must now also deduct tax on from your employee.

Tax and NI Payments

If your Tax and NI bill is below £1,500 per month you only have to pay the Tax and NI to HMRC on a quarterly basis. Be aware that late payments can result in hefty fines and interest being applied.

If your monthly liability bill exceeds £1,500 per month, you must pay HMRC every month.

Payment Deadlines Financial Quarter Months Covered
19th Jan 4 Oct, Nov, Dec
19th April 1 Jan, Feb, Mar
19th July 2 April, May, Jun
19th Oct 3 Jul, Aug, Sep

National Minimum Wage (NMW)

*The National Minimum Wage (under 24) changes every October, the National Living Wage (25+) changes every April.

Age Gross per hour
Under 18 £4.35
Age 18-20 £6.15
Age 21-24 £7.70
Age 25+ £8.21
Offset Allowance £52.85 per 7-day week

Pension Contribution

Below is a table that illustrates the minimum percentage of the employee's pay that an employer, an employee and the government will have to contribute this financial year.

Dates Employer Employee Government Total
6th April 2019 - 5th April 2020 3% 4% 1% 8%

 

For more information visit www.nannytax.co.uk or www.stafftax.co.uk.