How to pay your Nanny a Christmas Bonus
Many families pay their nanny a Christmas bonus as a special way of saying thank you. With additional outgoings during the festive season, a little bit of extra money will always go down a treat.
Here’s what you need to know about paying your nanny a bonus this Christmas:
Do I have to pay my nanny a Christmas Bonus?
Paying your nanny a Christmas bonus is not obligatory unless there is a clause in the contract of employment that states otherwise. However, bonuses are great as a token of gratitude for your nanny’s hard work – and what better time to gift this than during the most wonderful time of the year?
How much should a Christmas bonus be?
A Christmas bonus is usually calculated as a percentage of your nanny’s annual salary. At Nannytax we find this can vary from half a week’s pay to a full month’s pay. However, the bonus amount is entirely at the employer’s discretion.
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 will display the bonus payment and the subsequent tax due on the nanny’s payslip.
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. A bonus is a net payment which means we would still need to calculate the Tax and NI due on top of the amount your nanny receives.
Do I have to report any other Christmas gifts I buy for my nanny to HMRC?
As with most things in the payroll world, there isn’t a simple yes or no answer to this as it depends on the circumstances. You must report vouchers to HMRC as you will be required to pay tax on these. However, if it considered a ‘trivial benefit’ you do not have to declare this to HMRC.
Trivial benefits:
• Cost £50 or less to provide
• Are not cash or a voucher
• Are not a reward for work or performance
• Are not in the terms of an employee’s contract
What if I can’t afford to pay my nanny a Christmas bonus?
Showing your nanny appreciation 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!
How to Pay Your Nanny A Christmas Bonus
Nannytax Customers – if you would like to gift your Nanny a Christmas Bonus this year, you can submit this through your Employer Members Area in just a few clicks. From the Manage Employees tab, simply select Bonus, check whether this is a cash bonus and the amount you would like to pay. Our payroll team will reflect the bonus and any additional tax due to HMRC on your nanny’s next available payslip.
