What is happening?
The Autumn Budget of November 2024 announced a big change to the rates that all Employers pay their National Insurance (the amount they pay on top of what is deducted from their employee’s pay). Sadly, this will impact employers of domestic staff significantly due to them not being eligible for the Employment Allowance which reduces the Employer’s National Insurance bill each month for many employers who run businesses or charities.
What are the changes?
Currently, Employers pay NI on their employee’s pay over £758 per month / £175 per week at a rate of 13.8%.
From April 6th 2025, the threshold reduces to £417 per month / £96 per week and the rate increases to 15%.
How much will it cost?
For context, if we take the salary of a part-time Nanny who is paid £750 per month, currently there is no Employer NI due on that amount.
From April, the Employer will pay 15% on the amount over £417 each month creating a new Employer cost of £49.95 each month, increasing the annual cost by almost £600.
Taking the example of an annual salary of a full-time Nanny of £25,000 (£2,083.33 per month), the Employer’s NI will increase from £182.89 to £249.95.
Again, a significant increase in costs.
What can be done to help lower your costs as a Nanny Employer?
Without the help from the Employment Allowance, there is no way of reducing the additional National Insurance costs.
However, there are ways parents can reduce their total costs of hiring a Nanny such as: