6 Reasons Why Nannies Should Agree A Gross Salary
Why should a nanny agree a gross salary with their employer and not a net? We break it down with these 6 beneficial reasons.
1. Job Stability
A gross salary makes your employer aware of the costs of employing you from the start. This is because a gross salary incorporates Tax, NI and pensions if applicable. If an employer agrees a net salary before factoring in these additional costs, they may later realise they can no longer afford a nanny.
2. Tax-Free Allowance
If you are on a gross salary you will benefit from the increase in Tax-Free Allowance which is usually every April. This is the amount of income you can have before you pay tax. If you are on a net salary, your employer will benefit from this tax saving instead.
3. Banks and Loans
When applying for a mortgage or loan, you will be asked for evidence of your income such as your last 3 months’ payslips. They will need to see evidence of the gross income, not net.
4. Nanny Earning Power
Almost every other industry talks in gross salary terms and so you will have easier salary comparison if you make a career change later on. Employment as a nanny should be treated the same as if you were an employee in a nursery, school or office job.
Aligning nanny employment standards with other industries is a step in the right direction for elevating the nanny profession. We strongly advocate that nanny employment standards should align with all industry standards for employees, whether it’s salary agreements or statutory rights such as holiday allowance, sick pay or maternity leave.
5. Avoid Unpaid Tax Fines
HMRC also talk in gross salary terms. If you are on a net salary agreement, you could become liable for unpaid taxes if these aren’t being declared by your employer correctly. (pst… that’s what our award-winning services support employers with!)
6. Your Pension Pot
If you are on a net salary your employer will be paying both their 3% employer pension contribution and your 4% employee pension contribution. This creates an issue if you ever want to increase your side of the pension contributions.
The #GoGross Campaign
“We felt it was important for nannies to be empowered with their money, understand their payslips and step away from the pocket money feeling that net wages bring”
We started the Go Gross campaign in 2017 at a time when the majority of nannies were still paid a net wage agreement. We felt it was important for nannies to be empowered with their money, understand their payslips and step away from the ‘pocket money’ feeling that net wages bring. Through our nanny Facebook group ˜The Nanny Lounge’ we worked hard to educate nannies on the benefits of gross wages and how they help not only nannies, but improve the nannying industry as a whole. We are proud to see a huge increase in nannies now asking for gross wages, along with agencies making the switch to discussing gross wages.
Emma Georgia, Founder of NALO
