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How to Pay your Nanny a Christmas Bonus

Nanny Christmas Bonus

Is a Christmas gift for your nanny still on your to-do list? A Christmas bonus could be a great way to show your appreciation for your nanny, especially after what 2020 had in store!

Here’s what you need to know about paying your nanny a Christmas bonus this year.

Should I pay my nanny a Christmas Bonus?

Bonuses are not customary for any employer but they are a great way to give your nanny an extra thank you for their hard work. A monetary gift will always go down well this time of year as there are often extra outgoings with gifts, family plans and other expenses. Plus, we know that 2020 was a difficult one with many nannies working throughout the pandemic just to keep the little ones safe. Now may seem the perfect time to give your nanny that Christmas bonus as a token of gratitude.

How much should a Christmas bonus be?

This is entirely at the employer’s discretion and will differ per family’s circumstances. Most commonly nanny employers will offer a percentage of their nanny’s annual salary which can vary from half a week’s pay to a full month’s pay. It may be worth using a consistent calculation if you are paying your nanny a bonus each year.

Do I have to pay tax on the Christmas Bonus?

Yes you will have to pay tax on your nanny’s Christmas bonus. At Nannytax we ensure all Christmas bonus amounts are reflected on the nanny’s payslip accordingly.

Can I pay my nanny’s Christmas Bonus in cash?

Yes you can pay your nanny’s Christmas Bonus in cash if you choose to however this must still be reflected on the payslip accordingly. This would be considered a net payment for the purpose of payroll and Tax and NI would need to be calculated on top of the amount your nanny receives. (More on Net vs. Gross here.)

Do I have to report any other gifts I buy for my nanny to HMRC?

Unfortunately there isn’t a simple yes or no answer to this. For example, gifts such as vouchers must be reported to HMRC as you will be required to pay tax on this. However, if it considered a ‘trivial benefit’ you do not have to declare this to HMRC.

A benefit is considered trivial if:

  • It costs £50 or less to provide 
  • It isn't cash or a voucher
  • It isn't a reward for work or performance
  • It isn't in the terms of an employee's contract 

What if I can’t afford to pay my nanny a Christmas bonus?

Letting your nanny know they are appreciated doesn’t have to break the bank. It could be as simple as a personally written card or something made by the children. Heart-felt gestures like this can make your nanny feel just as valuable!

 

We hope you have a wonderful Christmas!

Nannytax Customers if you would like to gift your Nanny a Christmas Bonus this year you can submit this via your Employer Members Area. Alternatively email payroll on This email address is being protected from spambots. You need JavaScript enabled to view it. and we'll get it sorted.