Many people wrongly assume that nannies are self-employed and pay their own tax and National Insurance (NI).
But as soon as you start work as a nanny you become an employee and should be paid via payroll (PAYE).
This is good news because it means as well as getting regular pay, you’re entitled to employee rights such as earning the National Minimum Wage, Holiday Pay, Statutory Sick Pay, Workplace Pension and so on.
As a nanny, you’re classed by HMRC as an employee because:
- you work regularly in exchange for a salary
- you do the work yourself and can’t ask someone else to do it for you
- You’re told what to do, when to work and how to work
- You work at an address specified by your employer
- You’re provided with the equipment and materials that you need to do the job
In contrast, self-employed workers:
- don’t get a regular salary
- provide all the equipment needed to do their job
- decide what work to do, when to do it and how to do it
- can send a replacement if they cannot complete the work themselves
- complete the work at a time negotiated with their client
There are a few exceptions, perhaps if you work for several families at the same time, have had lots of temporary jobs or work as an au pair.
If you are registered as self-employed, your status does not automatically follow you from job to job, therefore your new ‘employer’ will need to get confirmation from HMRC in writing that your self-employed status can be applied to that specific job role. You will need to keep accurate records of your invoices and pay tax and NI through self-assessment.
As an employee you should receive the following from your employer: –
- An employment contract
- Be given payslips
- Be paid at least the National Minimum Wage
- Unless you have opted out, work no more than the maximum hours
- Be assessed for eligibility to Workplace Pension