Nannies and home-based childcare

Employing a nanny will mean you will be responsible for paying their tax and National Insurance contributions. It is good practice to provide your nanny with a written contract of employment. A number of statutory rights will also apply – a good place to find out is on the GOV.UK website.

Live-in nannies live with the family they are working for, who provide them with food and a private bedroom, in addition to their salary.

Daily nannies come to the family home each day. Baby-sitting in the evenings might be arranged as part of the terms of employment, or in exchange for extra pay.

Nanny-share is an arrangement whereby a nanny is shared by two families. If a nanny is shared by more than two families, they may be required to register as a childminder.

If a nanny is shared by more than one family, it is especially important to arrange the details carefully from the outset, with separate written agreements between the nanny and each family involved, so that everyone knows exactly what is to be expected.

Your nanny's pay will depend upon the type of job (live-in or live-out), the hours, the number of children to be cared for, the nanny's qualifications and experience and also upon the area in which you live. Nannies are covered by the National Minimum Wage and Living Wage.

For guidance about how much you should pay:

• Contact the Pay and Work Rights Helpline: 0800 917 2368
• Ask local nanny agencies for guidance

You must deduct tax and National Insurance from your nanny's pay unless you are paying less than the lower earnings limit. This can be done through the HM Revenue and Customs' PAYE (Pay as You Earn) scheme. If you are paying your nanny less than the lower earnings limit you will not need to make payments on her behalf, but she can still pay voluntary National Insurance contributions.

For advice and guidance: PAYE advice for employers on GOV.UK.

Finding the right person does take time, so do try to begin your search at least twelve weeks before you need your nanny to start work.

Where can I find a nanny?

Contact a nanny agency, many of which advertise in various specialist magazines and are available from the larger newsagents, or search the directory for nannies or au pairs. For a fee, an agency will match your specifications with those of suitable candidates who you will then interview. Even though a reputable agency should have carefully vetted potential nannies you should still ask the agency to tell you precisely what checks they have undertaken. Ultimately, you must rely on your own judgement of a prospective nanny.

Place an advertisement in a magazine or your local paper.

Contact local further education colleges that offer courses in childcare, if you are prepared to take on someone straight from college – training usually ends in June. Newly trained nannies will be relatively inexperienced and may not be especially suited to looking after very young babies.

Put an advertisement on local notice boards where potential nannies might look for new jobs, e.g. primary schools and drop-in clubs for parents, nannies and children.

Talk to other parents or join local parents' organisations, like the National Childbirth Trust (for your local branch call the NCT enquiry line on 0300 330 0700).

Writing an advertisement

Your advertisement needs to detail:

• Hours
• Duties
• Age(s) of children
• Area where you live

Do not include the names of your children or your actual address.

It may be preferable to ask potential nannies to write to a box number (your local post office can tell you how to get one) rather than you giving out your telephone number – although this may reduce the number of applications that you receive.

Ask respondents to send details of their age, experience, qualifications, employment history and a covering letter explaining why the nanny would like to apply for this particular post.

Mother's helps usually work alongside the parent helping with childcare and general household work. Mother's helps are unlikely to have formal childcare qualifications, but may be experienced.

Maternity nurses are specially trained to take care of new babies for up to three months after the birth. They generally live with the family.

Au pairs are single young people, who come from a member state of the European Community or one of a limited number of other countries. Au pairs come to the UK to study English and, whilst staying with families, help in the home for a maximum of five hours a day. They must have at least two full days off each week, and be provided with meals, an allowance and their own room.

Au pairs are not usually trained to work with children and therefore are not generally considered as being suited to looking after pre-school children while parents are at work. However, they can be a good option for providing after-school childcare.

Nannies do not have to be formally registered in this country; however, they can join the Ofsted Voluntary Register for people who look after children in the child’s own home. Under this register, a nanny is required to have a valid first aid certificate and public liability insurance, and to have undertaken some basic training in childcare.

Most nannies register with an agency to find work and some of these agencies run basic checks and will be encouraging them to apply for registration on Ofsted's Voluntary Register. If your nanny is registered, you may be eligible for the Childcare element of Working Tax Credits.