5 Considerations for Employing Household Staff in the UK
Call us: +442032900142 or info@bespokebureau.com for more information than these 5 considerations for employing household staff in the UK.
When you first employ household staff there are various factors to consider and legal responsibilities to be aware of, from knowing your total cost to your obligations at the end of the tax year.
Leading domestic staff Payroll Provider, Stafftax, explores 5 key factors for you to consider and be aware of when employing staff to work in your home.
1. Your Total Cost
One of the first factors to consider when employing household staff in the UK or when becoming a domestic staff employer is the total cost. Total cost is a term which refers to your total outgoings regarding your employee’s salary and is inclusive of:
- Employer’s National Insurance contributions
- Employer’s pension contributions
- Employer’s liability insurance.
Use the Stafftax Calculator to support you with understanding your total cost (this will allow you to assess your finances and give you a clear budget for your employee’s salary).
2. Registering as an Employer
Another factor to consider is registering as an employer with HMRC and setting up a PAYE scheme. You will need to do this if you will be paying your employee £120 gross per week or more. This must be done before your employee’s first pay day. Registering as an employer and setting up a PAYE scheme enables you to declare tax and National Insurance contributions each time you pay your employee.
If you will be paying your employee less than £120 a week, but your employee has more than one employment, it is advised that you still register with HMRC. This is because across your employee’s multiple employments, their earnings will be above the Lower Earnings Limit.
3. Paying your Employee and Paying Your Liabilities
On or before your employee’s payday, you must submit a Full Payment Submission (FPS) to HMRC, providing details of your employee’s earnings, deductions, and taxes. When you pay your employee, you must provide them with a payslip. Also it must clearly detail their salary, tax & National Insurance deductions, along with any other relevant information, such as Student Loan payments.
Following the end of each quarter, you are also responsible for paying your employee’s tax, National Insurance, and your Employer’s National Insurance contributions to HMRC, this is known as your liabilities. Please note, if your HMRC liability exceeds £4,500 per quarter, you will be expected to make monthly payments to HMRC.
4. Your Employee’s Pension
If your employee is eligible for a pension, you are responsible for enrolling them into a workplace pension scheme. Moreover, once your employee is enrolled, both you and them will contribute to their pension pot.
It remains a legal requirement for you to enrol your employee into a pension scheme. Even if your employee doesn’t wish to be enrolled. Once enrolled, they can choose to ‘opt out.’
5. End of Tax Year Obligations
A final factor to be aware of is that on the 5th of April each year, when the tax year comes to an end, you must give your employee a P60 form. This form must outline your employee’s total earnings and the taxes paid for the year.
Becoming an employer can be a daunting process, but with Stafftax you can save time, effort and worry with their affordable payroll solutions and unlimited HR support.
For more info than these 5 Considerations for Employing Household Staff in the UK, read here.
Contact us on +442032900142, or e-mail us on info@bespokebureau.com
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