Parental Bereavement Leave

As of 6th of April 2020, the government have introduced a new entitlement called Parental Bereavement Leave and Pay.

Under this leave/pay, parents who lose a child with a day-one employment right can take 2 weeks off work. These 2 weeks are at a statutory rate of £151.20 from April 2020.

Parental Bereavement pay is for adoptive parents, parents of a child born to surrogate, parents who are fostering to adopt and individuals caring for a child in their home, continuously for a period of 4 weeks ending with the date of death.

Parents will be able to take the leave as either a single block of 2 weeks, or as 2 separate blocks of one week each taken at different times across the first year after their child’s death. This means they can match their leave to the times they need it most, which could be in the early days or over the first anniversary.

2019-2020 Statutory Payments

From 6th April 2020 the rates for statutory payments will increase to the following.

 

SMP Statutory Maternity pay and SAP Statutory Adoption Pay are both increasing to £151.20 per week and 1st 6 weeks are still paid at either 90% of average earnings or £151.20 whichever is lower.

 

SPP Statutory Paternity Pay and ShPP Statutory Shared Parental Pay are both increasing to £151.20 per week or 90% of average earnings whichever is lower.

 

SSP Statutory Sick pay will increase to £95.85 per week and this only payable from the 4th consecutive working day off.

2020-21 NI changes

As an employer you will need to pay HMRC employee and employer Class 1 National Insurance based on nanny’s wage.

Employee national insurance is deducted from nanny’s gross salary, whereas employer’s National Insurance is an additional cost on top of nanny’s gross salary paid by the employer.

National Insurance is all based on the rates as below as per 6th April 2020:

 

Weekly Gross Wage Monthly Gross Wage National Insurance Paid  
£120.00 £520.00 0% lower earnings limit and employee not entitled to state   pension and as long as not working elsewhere does not need to be submitted to HMRC
£120-£183 £520-£792 0% lower earnings limit and NI threshold and needs to be submitted to HMRC as employee then qualifies for statutory payments
£169-£962.00 £732-£4,167 12% employee pays 13.8% employer pays
Above £962.00 Above £4,1687 2% employee pays 13.8% employer pays  

 

 

You pay this quarterly to HMRC along with nanny’s tax and student loan if applicable. If your PAYE bill is over £1,500 a month, you will have to pay your PAYE monthly to HMRC.

If nanny has more than one job, it is cost efficient to register separately as employers as each family will then get the benefit of the above exemption of national insurance.

2020-21 Tax

The standard tax code for tax year (20/21) from April 2020 is 1250L, this then means an employee can earn £12,500.00 per annum before they pay any tax. This figure is then spread over the relevant pay periods in the tax year (52 if weekly and 12 if monthly) this then gives the tax free allowance for each pay period.

This can only be used by one employer, and if nanny gets a second job Basic Rate tax must be deducted. Failure to deduct Basic Rate tax will cause an under payment of tax to nanny. Nanny will then either get a demand of unpaid taxes or her tax code will be reduced.

The rates for this tax year are:

Weekly Gross Earnings Percentage Tax Paid
Up to £240 0%
Between £240 and £961 20%
Between £961 and £3125 40%
Above £3125 45%

Nanny’s tax code may be increased if she is married and her husband does not use all of his tax free allowance (£12,500.00).