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Nannywage Ltd Automatic Enrolment Pensions
in association with NEST
Switching from your current payroll
provider to Nannywage Ltd (click here)

Automatic Enrolment Pensions

As an employer, if your employee qualifies by age and earnings or wishes to opt-in, you must set up a workplace pension.

Nannywage Ltd sets up your payroll & registers you as an employer, for a PAYE scheme with HMRC.

When we post to you the first wageslip and your starter correspondence, establishing your Nannywage Ltd file and client reference number, we enclose three letters;

The first is addressed to your employee.

You need to check the details, in order for us to enter the correct details of your employee, to enrol your employee into your workplace pension.

Once you have checked the details are correct, pass the entire pension letter to your employee. If there are any changes, please complete page 4 Changes to Employee details and e-mail us a copy, or post back to us with your pension page 3 details.

The second is addressed to you.

Across the top of the letter is your name and client reference. You need to check the details, in order for us to enter the correct details, when setting up your workplace pension scheme. Please complete the pension letter page 3 and e-mail us a copy or post it back to us. If there are any changes, please complete page 4 Changes to Employer details and e-mail us a copy or post it back to us with your pension page 3 details.

The third is general information regarding Automatic Enrolment workplace pensions.

You are in very safe hands, as Nannywage Ltd Pensions have been providing pensionable payroll services since 2008. We do everything on your behalf, as per our normal business practice, providing a full professional service at competitive rates.

We will send you our unique YES / NO pension questionnaire, (pension letter page 3) taking you a minute to complete, then you can sit back, secure in the knowledge that Nannywage Ltd pensions are handling everything on your behalf.

Why Nannywage Ltd does not ask you to complete on-line pension forms.

All pension provider companies require your bank details to set up a payment mandate, to take pension contributions direct from your bank account.

These contribution amounts are based on the Nannywage Ltd pension contribution report, submitted to the pension provider on your behalf, from your payroll for each pay frequency.

We do not expect or require any Nannywage Ltd clients to give us their bank details on our web site. Nannywage Ltd fully comply to the General Data Protection Regulations and once Nannywage Ltd start acting on your behalf and your HMRC PAYE account has been established, you will need to comply with The Pension Regulator workplace pension regulations.

You then need to take the next step and set up a workplace pension by returning to Nannywage Ltd your pension letter page 3, which requires your bank details. When you send us the pension page 3 is your choice, you can send it back to us to start the pension when you and your nanny require the pension start, or you are allowed to postpone the pension set up for up to 3 months from the payroll start date and whenever you decide to return the pension page 3, by then you will know who we are and feel secure entering your sensitive financial data.

You return pension page 3, even if your workers do not qualify, or do not wish to opt-in. We must have a hard copy of your pension instructions in your file which is pension page 3, without this we do not know your pension instructions and cannot continue to process payroll past your duties start date. (Pension page 3 is in the letter addressed to you).

RETURN PENSION PAGE 3

This is in the letter addressed to you with your name client reference across the top:

  1. Your pension duties start date is the FIRST day someone starts work for you
  2. You must hand the letter addressed to your worker/s within 6 weeks of employment start
  3. When we receive back from you pension page 3 we process pension set up
  4. You may wish to postpone for upto 3 months as allowed by law.
    When employing new staff, please consider pension set up postponement for 3 months from duties start date, as allowed by law, to ensure that you and your employee will work well together past this initial employment period and beyond.
  5. As each month passes if we have not received your pension instructions we send you a reminder. We will process normal payroll as HMRC still require current payroll reports under RTI ( Real Time Information payroll) and FPS compliance, this is where we must report your payroll activity to HMRC via on line submissions known as Full Payment Summaries.
  6. As we receive your pension instructions, if received after the penultimate Friday of a month we reserve the right to start pensionable payroll the next month
  7. At 3 months (maximum pension postponement) we will chase you for pension instructions and may have to suspend payroll if you exceed this time frame please try to avoid this situation

If the employee qualifies

You the employer must automatically enrol them into your workplace pension scheme. The current criteria for automatic qualification enrolment is:

If the employee does not qualify, they still have the right to opt-into your pension scheme.

  1. If the employee wishes to opt in and earns below qualifying earnings, called the Lower Earnings Level, the employer is not required to contribute
  2. If the employee wishes to opt in and earns above Lower Earnings Level, upto the qualifying earnings the employer is required to contribute

We set up your workplace pension & complete your Declaration of Compliance with The Pension Regulator (TPR) Assuming you choose to use NEST (National Employment Savings Trust), the government pension scheme.

If you subscribe to our pension service, we complete all TPR compliance on your behalf. We set up a NEST pension scheme on your behalf and administer the pension contributions.

Monthly payroll Nannywage Ltd Pension service is £67 inc VAT per employee per year.
Weekly payroll Nannywage Ltd Pension service is £78 inc VAT per employee per year.

Subject to you also subscribing to Nannywage Ltd payroll service.

If a non-qualifying worker does not wish to opt-in, you do not need to set up a pension scheme. However, all The Pension Regulator (TPR) knows about you is that you are a HMRC registered employer. In this situation you may not need Nannywage Ltd pension support, however, As an employer, you must inform TPR of your pension circumstances, by completing a Declaration of Compliance within 5 months of duties start date, or face heavy non-compliance fines starting at £400.

If you subscribe to our pension service, with a one-off fee for non-qualifying non-opt employees, we complete all your Pension Regulator pension compliance, including the Declaration of Compliance. If at a future date a pension scheme is required, the fee also covers first year pension service.

Nannywage Ltd pensions give you the choice to complete your own Declaration of Compliance with The Pension Regulator, if your employee does NOT qualify. Unlike many payroll providers who charge you a pension service subscription, even if you do not require a pension scheme at the time and charge you, to assess your employees each pay day, to see if your employee now qualifies. Please remember as an employer a Declaration of Compliance must be re-filed with TPR every three years.

If you choose to complete your own Declaration of compliance. You must complete this within 5 months of your duties start date.

You are completing your own Declaration of Compliance with The Pension Regulator, because you have no qualifying or opt-in employees and do not require a workplace pension.

You do not wish to subscribe to Nannywage Ltd pension service or require Nannywage Ltd pension support and in this situation Nannywage Ltd pension services has no liability or responsibility whatsoever regarding your pension compliance.

However, you must still return pension page 3 so that we know your pension instructions and intentions.

Nannywage Ltd pensions, even without a pension service subscription, should the time come when you wish to close your HMRC PAYE scheme, as you have no employees and do not plan on employing further, will inform on your behalf, The Pension Regulator that you are no longer an employer for the purpose of Automatic Enrolment pension, closing your pension compliance file.

As an Employer you are free to choose the pension provider you wish to use.

Nannywage Ltd Pensions are unable by law to advise you which provider to use, as you must by law choose which pension provider you wish to use.

However, whichever pension provider you choose to use, it should be remembered that the Minimum contribution percentages are the same for all Automatic Enrolment schemes*. The Pension Regulator states that an employer has the right to choose their own pension provider. In reality some large pension providers have stated they may not accept small employers for Automatic Enrolment pensions, as they deem it not financially viable, some have completely withdrawn their small employer facility and of the remaining providers, some are charging up to £500 as a one off set-up fee.

*Please note. If you or your employee, wish to contribute a higher percentage of salary than the current minimum percentage contributions. You must e-mail Nannywage Ltd Pensions with your EXACT PERCENTAGE CONTRIBUTION instructions for Employer & Employee percentage contributions.

If you choose to use NEST (National Employment Savings Trust), the pension service provided by the government. Nannywage Ltd Pensions will fully manage your pension set up and continuing compliance each month or week, inclusive of all regulatory letters to your nanny, subject to you using Nannywage Ltd payroll service.

If you choose a pension provider other than NEST, you will still need to subscribe to Nannywage Ltd pensions service, in order for us to process your pension scheme in payroll and show pension contributions on your wageslip, but you will have to administer the scheme.

Pension Contributions

Pension contributions are a fixed statutory minimum percentage contribution

Currently (Tax Year 6 April 2018 – 5 April 2019)

Employer contribution is 2% of GROSS qualifying earnings.
Employee contribution is 3% of GROSS qualifying earnings.

Employee actually contributes 2.4% of GROSS qualifying earnings as employee contributions are tax free (20%) & HMRC contributes 0.6% making employee total 3%. A tax efficient way for the employee to save.

Qualifying earnings are Gross earnings after the Lower Earnings level has been deducted. Each year we will, of course, automatically implement new LEL and UEL as set by HMRC.

Pay your employee the NET shown on each wageslip.

The Employee pension contribution you are deducting from their net salary. You pay the net Figure shown on the wageslip, as the net shows the salary figure after the employee pension contribution has been deducted.

You need take NO ACTION over making pension contributions to NEST.

Each pay day, Nannywage Ltd Pensions will inform NEST of the TOTAL pension contribution,this is your employer contribution and the employee contribution you have already deducted from their net salary.

Nannywage Ltd pensions do this by CSV file format and you agree that Nannywage Ltd will fully administer the contribution reporting to NEST.

You are, each pay day, sending the employee contribution to NEST with your contribution via bank transfer. Your bank statement will show a TOTAL contribution taken for employee and employer. NEST will take the total contribution from your bank account by payment mandate.

Contribution totals are shown on each wageslip as Ee (employee) & Er (employer). On the far right of each wageslip are the cumulative pension totals to date (per tax year).

FAQ's

A qualifying worker: This is a person between 22 years of age and state retirement, with earnings in excess of the current earnings allowance. These workers are automatically enrolled into your pension scheme.

Non qualifying worker: The employer should still have a pension scheme in place, should the employee choose to opt-in to the scheme at a later date.

Pension compliance: As an employer, you must enrol employees into a pension scheme and the Pension Regulator has the power to impose non-compliance fines. You, the Employer cannot tell your employee not to join and if you do, again, the Pension Regulator has the power to impose fines.

Status of employee: If the employee is under the threshold for salary or outside the age limits, you will still need to comply to The Pension Regulator Declaration of Compliance, even if you do not set up a pension scheme.

If the employee does NOT want a pension: The employee can opt out. The employer must still set up a pension scheme and enrol the qualifying employee. The employee then must contact the pension provider to arrange opt out. If the opt out is completed in the first month, the employee & employer will receive a full refund of contributions. If the employee opts out after the first month then they do not need to make further contributions, but the contributions made will remain in their NEST pension. The employer must maintain the pension scheme, should at any time the employee change their mind and decide to opt back in.

What Nannywage Ltd Pension service does for you:

Subject to you deciding to use NEST and subscribing to Nannywage Ltd Pension & payroll services:

  1. We set up a pension scheme
  2. We send to you all regulatory letters
  3. Set up your Direct Debit Mandate
  4. Assess your workers
  5. Enrol your employee/s in your pension scheme
  6. Complete your declaration of compliance with The Pensions Regulator
  7. Assist with employee opt outs and opt-ins
  8. Automatically inform NEST of your contributions, so they automatically take contributions from your designated bank account
  9. Comply to The Pension Regulator rules and store your enrolment records

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