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UK Government Budget | Spring Budget and Statement | Nannies and Nanny Employers | Nannytax

Does The National Insurance Increase Reverse Affect Nannies?

Budget | Spring Budget | Statement | Nannytax

From Wednesday 6th November 2022, the National Insurance increase will be reversed. This means the National Insurance contribution rates for employers and employees will be cut by 1.25% to reverse the National Insurance rise in April.

How will this affect my Nanny’s pay?

The effects of the NI increase reverse depend on whether your nanny is on a Gross or Net salary agreement.

Gross Salary Agreements

For Gross salary agreements, the employer will pay 1.25% less Employer NI and the nanny will pay 1.25% less Employee NI contributions. This means the nanny will see an increase to their take home pay and the employer will make a saving on their Employer NI contributions.

Net Salary Agreements

For Net salary agreements, the employer will pay 1.25% less Employer NI and 1.25% less Employee NI, resulting in a 2.5% saving on NI contributions. The nanny’s take home pay will not change. This is because on a Net salary agreement, the employer is responsible for paying all the tax and NI contributions.

When will the National Insurance increase reverse take place?

The National Insurance reverse comes into effect Wednesday 6th November. Nannytax customers will see these changes reflected in their November payslips.

Our Nanny Payslip Explainer may come in handy:

The employer’s National Insurance contributions can be found under Number 8 – This Period: Employer’s NI.

The nanny’s National Insurance contributions can be found under Number 6 – Deductions: National Insurance.

What about the National Insurance threshold increase?

The National Insurance reverse does not affect the threshold increase which took place in July. The NI threshold increase is related to the amount an employee can earn before paying National Insurance. You can read more about this here.

What about the Social Care levy tax in April 2023?

The government announced that the Health and Social Care Levy due to be introduced from April‌‌‌ ‌‌2023 will no longer go ahead.

How can Nannytax help?

As a Nannytax customer you don’t need to do anything – we will take care of implementing the NI reverse for you. You will see what the saving is on your nanny’s first November 2022 payslip.

Not a Nannytax customer? Join Nannytax to save yourself time and hassle. We can supply monthly or weekly payslips for you and your nanny covering the tax and NI due to HMRC and the remaining net salary to pay to your nanny. With our Nannytax Plus service, we can make the monthly payments on your behalf so you have even less to worry about.

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