Hiring a nanny: The laws behind it

Employing a nanny to help you with your busy working life has many advantages but you do need take into consideration the legal and financial side. Below are points that you should give some thought.


Once you have found the perfect nanny for your family, you are officially their employer. Creating an official and formal contract is one of the responsibilities of becoming an employer. They have the same benefits as any other people who work in the UK as they are making their career out of helping and looking after your child/children, so it is actually illegal to not give them a legal contract.

A contract should outline their annual salary/hourly rate, working hours, working days, entitlement of holiday days and their notice period if they choose to leave. It should also include a clear but detailed description of their day-to-day duties and exactly what you expect from them during their working hours.  When the contract has been written, you should both have a copy each that are signed and dated with their signature as well as yours. Both of you should keep the contract in a safe place for future reference.


Nannies that don’t live with your family are protected by the Minimum Wage requirements in the UK. Depending on the age of the nanny, depends on what they must be paid hourly. When discussing hourly rates, you can get a schedule making software to track their working hours and take into account the qualifications and experience they have as this can put their rates higher as well as what the minimum age is for their age.

As previously said, minimum wages will vary based on age and should be taken into account before securing the ideal candidate. For people aged between 18-20 years, the current minimum wage is £5.90 every hour. Between the ages of 21-24, the minimum wage rises to £7.38. Candidates who are over 25 are entitled to £7.83.

As said above, these are the wages that they have to be paid hourly but when deciding on their rate, taking their experience and qualifications into account is a fair and legitimate reason to pay above minimum wage. If one of the duties of your nanny is to drive your children to places – to school, friends or classes etc. then this is something you should perhaps consider when figuring out their wage. Some people may increase the hourly rate to include the prices of petrol or may pay it as an add on – this may be better as the miles they use monthly may differ throughout the year. Click here to find out more details on wages.

Things are slightly different with nannies who live in and develop into being part of your family as certain activities could be exempt from hourly rate schemes. For example, eating and mingling with the adults rather than being with the children. Again, you just need to be sure that everything is very clearly outlined within their contract and job description so they know what is being paid and what is exempt.

HMRC Requirements:

As an official employer, you are accountable for overseeing their income tax and national insurance contributions. It is extremely unwise to give them cash in hand as this could lead to substantial fines from HM Revenue and Customs. You are also responsible for looking over a pension scheme if they are entitled to one.

The nanny should receive a payslip every time they get paid, whether that be every week, two weeks or monthly. This should have information on it about what pay they have received this month, including holiday pay plus any deductions such as sickness, tax, national insurance or pension. As the employer it is part of your job to ensure everything is paid properly.


Liability Insurance Policy is something that is a legal requirement to have for your employee. This guarantees you are protected if your nanny became ill or injured whilst at work.

Many companies have refined insurance policies that are unique to nannies which is a great place to start when searching for the right policy for you.

Some nannies – mainly live in nannies –  will go on holidays with the children/families they look after. Therefore, if your nanny were to come travelling abroad or locally with you, you need to be sure to take out another insurance policy to cover them during that period for injury, loss of luggage, delayed flights etc. – just like you would do for your children and yourself. If something were to happen when on holiday that resulted in an injury to someone, visit accidentclaims.co.uk to help you with these issues and how to claim.

Finally, your nanny is liable for the care of your children so you need to one hundred percent on everything and that it is all done correctly and legally. If one of the duties expected from the nanny is to take your children places in a vehicle – to school, play dates or evening classes etc. then you must ensure she/he is covered to drive either your car or their personal vehicle. Double checking all of these insurance policies will put your mind at ease just in case anything occurs and you need to claim.

Help from the Government:

In 2017, our government bought in a scheme that supports working families that includes child-care that is tax-free.

To be entitled to receive the help, your children has to be below 11 years of age and both parents or a single parent have to be employed. Your annual earnings do come into whether you qualify as there are earning thresholds.

So, how does it work?

The government will add £2 for every £8 you spend on childcare. The extra £2 can be spent of whatever you wish to help with your children but it is a fantastic idea to put towards your nannies wages. Being a part of this means you could gain £500 every quarter, resulting in £2000 a year.

It is vital to take all points made in this article seriously as majority are either legal requirements or will help you greatly if any minor or major issues were to occur. When becoming an employer, it is essential to make sure your own back is covered as well as your employees and following these steps will ensure that.

Article for FamilyFriendlyWorking by AccidentClaims.co.uk

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