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Nanny Shares | Nannytax

Nanny Shares

How does a nanny share work?

Nanny shares have given more families the opportunity to hire a nanny and reap the benefits of flexible, home based childcare. This is because a nanny share enables families to share the costs of a nanny. However it’s important that both families understand that they must fulfil their own responsibilities as separate employers.

What is a Nanny Share?

A nanny share is an arrangement where two or more families employ the same nanny. This could mean the nanny cares for all children at the same time, or splits the week between each family. The families don’t necessarily have to know each other but having good communication will make the arrangement much easier.

The most important thing to understand about nanny shares is that each family involved is considered a separate employer. Therefore each family will have their own responsibilities – even if the nanny provides childcare under the same roof.

What are the benefits?

Lowers the costs – Families share the cost of their nanny, making this form of childcare more accessible and affordable. This gives more families the opportunity to benefit from this flexible and personalised part-time childcare.

Top quality Nanny – You may find the nanny of your dreams comes at a price. Nannying is a highly skilled job and if your nanny is offering specialist skills it’s likely they’ll demand a higher salary. Nanny shares give more families the opportunity to employ top quality nannies.

Children build relationships – Children can develop their relationship building skills through regularly mixing with other children. It’s great to know that whilst you aren’t able to be with them, they’re sure to be having loads of play time fun and may even make life-long friends.

What to consider in a Nanny Share

Nanny PAYE Scheme – Each family must register as an employer with HMRC and set up their own PAYE scheme to declare tax and NI on the nanny’s earnings.

Nanny Salary – Each family must pay the nanny at least the National Minimum Wage each. We recommend you agree a gross salary with your nanny to protect your employment costs (read more about Net vs Gross here).

Contract of Employment – Each family should have a separate contract with the nanny. This will make the process a lot smoother if one family wishes to leave the arrangement further down the line. You must provide the contracts by the nanny’s first day of work. That’s why at Nannytax our HR advisors draw up a bespoke contract upon sign up so it’s ready for the beginning of the employment.

Employers Liability Insurance – This is a legal requirement for all UK employers to protect themselves in case a nanny becomes ill or injured as a result of their job. Both families must have their own Employers Liability Insurance policy such as Enable Insurance.

Holidays – We recommend you talk to the other family and the nanny about holidays. A common solution is for each family to decide on one week and the nanny to decide on two weeks. See our holiday entitlement page for guidance on calculating holiday allowance.

A Nanny Share Agreement

If the nanny is caring for the children from two or more families at the same time, you should agree rules and standards up front. It is worth having a Nanny share agreement to address this. If you are a Nannytax customer our HR advisors can support you with this.

Split Tax Code

Some families in a nanny share arrangement like to split the nanny’s tax code. This makes it fairer as it prevents just one of the employers paying basic rate tax on all of the nanny’s earnings. However, if both employers are paying the nanny a gross salary then this won’t be necessary. A tax code split is entirely at the employee’s discretion.

Due to new HMRC ruling called Dynamic Tax coding, the nanny’s tax code will be calculated based on how much the employee has earned already during the tax year, how much the employee is predicted to earn, and then the remaining will be split between employers.

Therefore, regrettably we are unable to provide accurate salary calculations for nanny shares until HMRC has allocated a tax code for the nanny in their new job.

Nannytax and Nannyshares

There may be more to consider in a nanny share than you anticipated. Don’t worry – at Nannytax we have a dedicated team of Nanny Share specialists. We’ll set you up with the right contract, run your nanny’s pay slips and deal with HMRC on your behalf. We can also provide you with Employers Liability Insurance and manage your nanny’s pension scheme. If you’d like to sign up to our services or speak to someone who can tell you more, please don’t hesitate to give our team a call on 0203 137 4401 between 8.30 – 5.30, Monday to Friday or email mailbox@nannytax.co.uk.

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