2019-20 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

Weekly Gross    (Based on standard tax code)

Up to £240.00                0%

£240.00-£961.00          20%

£961.00-£3,125.00         40%

Over £3,125.00              45%

National Insurance

Weekly Gross              NI Paid

Up to £118.00               0%      

£118.00-£166.00           0%      

£166.00-£962.00          12% paid by the employee / 13.8% paid by the employer

Above £962.00             2% paid by the employee/ 13.8% paid by the employer

Student Loans

With effect from April 2019, 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 Loan

The DfE has introduced a new loan type from 6 April 2019, Postgraduate Loan (PGL).  The threshold for 2019/20 is £21,000.  Earnings above £21,000 for PGL will be calculated at 6%.

Redundancy

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

Age                                       Redundancy payment due

18 to 21                               Half a week’s salary or £254.00 whichever is lower

22 to 40                              One week’s salary or £508.00 whichever is lower

41 & over                            One and half week’s salary or £762.00 whichever is lower

We advise contacting us directly to accurately calculate redundancy pay.

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