Payroll and Employment Support.
Nannies Provided through Teddies Agency are employed directly by the family or work as self-employed professionals.
As the employer, parents are responsible for adhering to employment laws, including taxes, National insurance contributions, and contracts of employment
Payment Terms
Hourly/Weekly Rates: Nanny rates are competitive and vary based on experience, qualifications, and duties.
Payments should be made on a weekly or monthly basis, as agreed upon in the employment contract.
Additional Costs
Overtime: Any hours worked beyond the agreed schedule will be charged at an overtime rate.
Expenses: Families are expected to cover costs for any agreed-upon activities, travel with children or meals during working hours (if required)
Holidays and sick Leave
Nannies are entitled to holiday pay as per statutory requirements (28 days annual leave, pro-rated if working part time).
Families should also outline sick leave policies in the employment agreement (contract).
Tax and insurance
In the UK if you are employing a nanny it's legally your responsibility to make sure the nanny is on PAYE (Pay As You Earn) Scheme and their tax and national insurance is paid.
The Nanny should receive a payslip each time they are paid. An end of year tax P60 every year.
Cash in hand may seem an easy option but it's not. HMRC Revenue and Customs take not paying tax and national insurance very seriously. You could receive a fine or a penalty for not declaring.
Nannies, it's important that you check that your employer is paying your tax and national insurance by checking your pay slip.
By your tax and insurance not being paid you can lose benefits that you are entitled to such as:
- Holiday entitlement
- Sick pay
- Maternity Pay
- Redundancy
- National Insurance contribution for your state pension
- Finance lenders (mortgage and loans) Finance companies will ask for proof of earnings when applying for finance.
Tax Free Childcare
Childcare can be really expensive. The government have set up a scheme "Tax Free Childcare".
You can claim up to £500 every 3 months for each of your children, to help towards childcare which includes help with:
- childminders, nurseries and nannies
- after school clubs and play schemes
Your childcare provider must be signed up to the scheme before you can pay them and benefit from Tax-Free Childcare.
When you have set up a Tax Free Childcare account online, for every £8.00 you pay in the government will pay in £2.00 to use to pay for your childcare provider.
To be eligible for the tax free childcare it depends on:
- whether you’re working (employed, self-employed, or a director)
- your household income
- your child’s age
- your immigration status
Pension Act 2018
Nannies, If you are aged between 22 and state pension age and earn more then £10,000 per annum a pension is required. This is compulsory in the UK.
If you are below the age of 22 and earn less then £10,000 a year, you have the option to opt in if you want to start a pension.
The pension works by a percentage which is taken from your monthly salary and both your employer and the government pay a percentage.
If your employer does not offer a pension scheme they could be looking at a fine from The Pension Regulators.
Teddies Agency Teams Up with Nanny Tax to Make Hiring a Nanny Hassle-Free!
Hiring a nanny should be a joyful and exciting experience—not a stressful one filled with tax and payroll worries. That’s why Teddies Agency has teamed up with Nanny Tax, a highly recommended payroll service, to make your life easier when employing a nanny.
Why Teddies Agency Recommends Nanny Tax
At Teddies Agency, we pride ourselves on connecting families with top-tier nannies. But we also understand the importance of paying your nanny legally and handling tax obligations correctly. That’s why we highly recommend Nanny Tax—a trusted payroll and tax service designed specifically for household employers.
How Nanny Tax Simplifies Your Life
With Nanny Tax, you don’t have to worry about complex payroll calculations, tax filings, or legal compliance. Here’s how they help:
Stress-Free Payroll Management
Nanny Tax handles all payroll tasks, including salary calculations, tax withholdings, and direct deposits, ensuring your nanny is paid accurately and on time.
- Complete Tax Compliance
They take care of Social Security, Medicare, and unemployment taxes—helping you avoid IRS penalties and legal risks.
- Year-End Tax Filings Made Easy
Nanny Tax provides W-2 forms for your nanny and prepares Schedule H for your tax return, making tax season effortless.
- Ongoing Support & Guidance
Not sure how to handle nanny taxes? Nanny Tax's experts are available to answer all your questions and guide you through the process.
Enjoy Peace of Mind with Teddies Agency & Nanny Tax
By teaming up with Nanny Tax, Teddies Agency ensures that families receive a seamless hiring experience—from finding the perfect nanny to handling payroll and taxes with ease.
Ready to simplify your nanny payroll? Contact us today to learn more about how Nanny Tax can help you!
Employment Contract
Employment contract is a legal agreement between two parties, the family and the nanny who is being employed. The contract should be set out with
- Responsibilities
- Duties
The contract will provide
- An employment relationship
- Provide assurance of responsibilities and duties in their role.
Teddies Agency offer a sample contract to clients. A word document that can be edited and adapted to yourself.
We do advise you seek legal advice on further information about the contract.
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