How does the 2025 Autumn Budget impact nanny employers?
The Government’s 2025 Autumn Budget has been announced and there are changes being made which will impact nanny employers.
1. Increase to National Living Wage
From April 2026, the National Living Wage will increase by 4.1%, from £12.21 to £12.71 per hour.
If your nanny is living with you and you are operating the accommodation allowance, the accommodation offset rate will increase by 4.1% to £11.10 per day.
As a nanny employer, you must ensure you are paying your nanny in line with the latest rates for the National Living Wage and the National Minimum Wage.
If you are a Nannytax customer and would like to check that your nanny’s salary will still meet the National Living Wage and the National Minimum Wage in April 2026, please contact our friendly team.
2. Tax and National Insurance
The freeze on tax and National Insurance has been extended until 2030 – 2031.
The amount of Income Tax you deduct from your employee depends on their tax code and how much of their taxable income is above their Personal allowance. Your nanny’s personal tax free allowance will continue to be frozen at the limit of £12,570. This means they will continue to pay income tax on any earnings which are above the £12,570 threshold.
3. From April 2029: Salary Sacrifice on Pension Contributions
National Insurance relief on salary sacrifice pension contributions will be capped at £2,000 from April 2029. This means that any contributions above £2,000 will be subject to National Insurance payments by both the employee and the employer.
