Nanny & Au Pair Tax UK 2026/27: Why Most Nannies Are Employees, Not Self-Employed
Most nannies are employees of the family they work for, not self-employed contractors, which changes who pays tax and NI. Full worked example on a £28,000 nanny salary.
The employment-status default for nannies
Unlike many home-based working arrangements, HMRC's position on nannies is unusually clear-cut: a nanny working in the family's home, on hours and duties the family controls, using equipment the family provides, is almost always an employee, not a self-employed contractor — regardless of any agreement calling the arrangement "self-employed" or paying a flat invoiced rate. Getting this wrong isn't a minor technicality: it shifts significant legal and financial responsibility (PAYE registration, payroll, employer NI, pension auto-enrolment) onto the family.
Take-Home Pay Calculator
Calculate your net salary after income tax, National Insurance and student loan deductions.
Open Take-Home Pay calculatorWorked example: the family's cost, £28,000 gross salary
Gross nanny salary: £28,000
Employer National Insurance: (£28,000 − £5,000) × 15% = £23,000 × 15% = £3,450
Total cost to the family: £28,000 + £3,450 = £31,450
Worked example: the nanny's take-home
Income tax: (£28,000 − £12,570) × 20% = £15,430 × 20% = £3,086
Employee National Insurance: (£28,000 − £12,570) × 8% = £15,430 × 8% = £1,234
Total deductions: £4,320
Take-home: £28,000 − £4,320 = £23,680
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Open Salary Converter calculatorAu pairs: a different framing, not a different law
Au pair arrangements are typically structured around cultural exchange, board and lodging plus pocket money, rather than a standard salary — and where pocket money stays below typical thresholds, families often don't need to register for PAYE. But the label "au pair" doesn't itself exempt anyone from employment law or tax rules: if the actual arrangement looks like ordinary paid childcare employment (set hours, market-rate pay, minimal genuine cultural exchange), HMRC can look through the label to the substance.
What families need to set up
- Register as an employer with HMRC before the first payday
- Run PAYE payroll each pay period (many families use a nanny payroll service)
- Deduct income tax and employee NI, pay employer NI
- Assess pension auto-enrolment duties (most household employers do have these once conditions are met)
- Provide payslips and an annual P60
Filing and paying
The family registers as an employer and runs payroll each period, deducting tax and NI at source — the nanny doesn't need to file a Self Assessment return for this income unless they have other untaxed income requiring one.
uk-childminder-nanny-tax-guide-2026Frequently asked questions
Is a nanny self-employed or an employee?
The overwhelming majority of nannies are employees of the family they work for, not self-employed. HMRC's guidance is explicit that nannies working in a family's own home, on hours and duties set by the family, using the family's equipment (car seats, high chairs, the home itself), almost always meet the tests for employment, regardless of what any private agreement between nanny and family states.
Who is responsible for paying a nanny's tax and National Insurance?
The employing family is responsible for registering as an employer with HMRC, running PAYE payroll, and deducting income tax and employee National Insurance from the nanny's pay each period, as well as paying employer National Insurance on top of the gross salary — the same obligations any other employer has.
Are au pairs taxed the same way as nannies?
Au pairs are treated differently in practice because the relationship is usually framed as cultural exchange with pocket money and board rather than a standard employment contract, and typical au pair pocket money often falls below the level where PAYE registration is required. However, if an au pair's arrangement in substance looks like ordinary employment (set hours, market-rate pay, no genuine cultural exchange element), HMRC could treat it as employment requiring PAYE.
How much does it cost a family to employ a nanny on a £28,000 gross salary?
Beyond the £28,000 gross salary, the family also pays employer National Insurance at 15% on earnings above the £5,000 secondary threshold: (£28,000 − £5,000) × 15% = £3,450, taking the family's total cost to roughly £31,450, before accounting for any Employment Allowance (which doesn't apply to most household employers).
How much does the nanny take home from a £28,000 salary?
Income tax: (£28,000 − £12,570) × 20% = £3,086. Employee NI: (£28,000 − £12,570) × 8% = £1,234. Total deductions £4,320, leaving take-home pay of approximately £23,680.
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