Gross vs net - the story continues .....
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Further to our blog of 16 January this year, it has come to our attention that the confusion continues - see here if you wish to re-read https://www.facebook.com/notes/wimbledon-nannies/a-nannys-pay-gross-vs-net/2515477935145807/
Nannies, agreeing a gross salary ensures that you meet your tax and NI obligations and your pension is calculated accurately and parents will have a better understanding of the overall cost of employing a nanny.
It is also a lot easier to compare yourself in the market place as a whole as all other professions and form of employment talk in terms of gross pay and never net pay. As a small example, take the National Minimum Wage or Living Wage, they are always quoted in gross never in net. As such, we need to keep ‘banging this drum’.
We thought it would be useful if we provided a little breakdown based on typical working hours and market rates paid currently.
Assuming a nanny has the current tax code of 1250L then the figures break down as follows:
£33,025 gross per annum equates to a net weekly salary of £500 (£10x50h)
£36,842 gross per annum equates to a net weekly salary of £550 (£11nphx50h)
£40,671 gross per annum equates to a net weekly salary of £600 (£12nphx50h)
£44,488 gross per annum equates to a net weekly salary of £650 (£13nphx50h)
We also realise that live in rates are normally quoted weekly rather than hourly so thought we would give a similar breakdown for those too:
£21,549 gross per annum equates to £350 net per week
£25,378 gross per annum equates to £400 net per week
£29,195 gross per annum equates to £450 net per week
£33.025 gross per annum equates to £500 net per week
Please be aware that your employer is liable to pay Employer’s National Insurance contributions and their part of the pension contribution on top of the gross figure. Your tax and NI contribution is included in the gross figure, the only thing that gets deducted from the net figure will be your element of the pension contribution. In order to ensure you/your employer pay the correct pension the salary needs to be stated in gross.
We do hope the above breakdown will help both nannies and parents alike in understanding the salaries and please remember all salaries should be agreed in gross.