2021-22 Tax, NI, Student Loan & Redundancy

All employees, including temporary and part time, must make Tax and national insurance contributions.

Employers, including domestic employers, legally have to make Tax and national insurance deductions from a nanny's wage and pay this to the government on the nanny's behalf.

Tax

Annual Gross (Based on standard tax code)

Up to £12,501 0%

£12,501-£50,000 20%

£50,001-£150,000 40%

Over £150,000 45%

National Insurance

Monthly Gross NI Paid

Up to £520.00 0%

> £797.00 Employees start paying NI

> £737.00 Employers start paying NI

£797.00-£4,189.00 12% paid by the employee

£732.00-£4,189.00 13.8% paid by the employer

Above £4,189.00 2% paid by the employee / 13.8% paid by the employer

Student Loans

With effect from April 2020, the thresholds for making Student Loan deductions under the 2 schemes are as follows.

The nanny will pay 9% student loan on everything they earn over:

Plan 1 - £18,935 annually (£1,577.92 a month or £364.14 a week)
Plan 2 - £25,725 annually (£2,143.75 a month or £494.72 a week)

Postgraduate Loans

Plan 1

The thresholds are £382.59 a week or £1,657.91 a month (before tax and other deductions).

Plan 2

The thresholds are £524.90 a week or £2,274.58 a month (before tax and other deductions). They change on 6 April every year.

Postgraduate Loan

The thresholds are £403.84 a week or £1,750 a month (before tax and other deductions).

Redundancy

All employees are entitled to redundancy pay after 2 years of complete service.

1.5 weeks’ pay for each full year of employment after their 41st birthday
a week’s pay for each full year of employment after their 22nd birthday
half a week’s pay for each full year of employment up to their 22nd birthday

Weekly pay is capped at £538. The maximum amount of statutory redundancy pay is £16,140.

We advise contacting us directly to accurately calculate redundancy pay.

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