Always agree a gross wage
We strongly advise all our subscribers to agree a salary based upon a gross wage (i.e. before deduction of tax and employee’s NI).
Parents often agree a net (i.e. take-home) wage with their nannies, but in reality a nanny is always paid a gross salary, with tax and National Insurance Contributions deducted and paid to HMRC on a quarterly basis by the employer. Although many employers tend to look on this as an additional cost, it is actually part of the nanny's gross wage.
If you agree a fixed net wage you are committing yourself to paying all of your employee’s income tax and NI to make up their gross wage, irrespective of their individual tax code or tax position.
Please also be aware that a gross wage is not the total cost to you as an employer. In addition to this you have to pay an Employer’s National Insurance Contribution, which is not part of the employee’s gross wage. This extra sum will be advised to you when we send your first payslip for your employee.