In partnership with Stafftax
What do I need to know about employing domestic staff in the UK?
When you employ domestic staff, you become responsible for a variety of obligations that you must fulfil to ensure you comply with HMRC.
Stafftax, the leading domestic Payroll Provider, delves into what you need to know as a domestic staff employer to keep yourself compliant.
Providing an Employment Contract
The first thing to know is that on or before your employee's first day of work, you must provide them with a contract of employment. The employment contract will ensure that both you and your employee have a clear understanding as to what is expected of them and establishes the foundation of a positive working relationship.
Registering with HMRC
All UK employers, including domestic staff employers, must register with HMRC and set up a PAYE scheme if their employee is paid £120 gross per week or more. If you plan to pay your employee less than £120 gross per week but your employee has more than one job, their total earnings will be above the Lower Earnings Limit and so it is recommended that you still register as an employer with HMRC.
Please note, you will need to register with HMRC before your employee's first pay day.
Paying your Domestic Staff
Each time you pay your employee you must provide them with a payslip, detailing their salary, tax & National Insurance deductions, and other necessary information, such as Student Loans. It's important to be aware that on or before your employee's pay day, you must submit a Full Payment Submission (FPS) to HMRC, providing details of your employee's earnings, deductions, and their taxes.
Paying your HMRC Liabilities
At the end of each financial quarter, you are responsible for paying your employee's tax, National insurance, and your Employer's National Insurance contributions to HMRC. You will be expected to make monthly payments to HMRC if your HMRC liability exceeds £4,500 per quarter.
Enrolling your Employee into a Pension Scheme
It's a legal requirement for you to enrol your employee into a workplace pension scheme. Once enrolled, you and your employee will make contributions to your employee's pension pot. If your employee does not want to be enrolled into a pension scheme, you are still required to enrol them. They can choose to 'opt out' of the scheme once they are enrolled.
Your End-of-Tax-Year Duties
The last thing you need to know is that you must give your employee a P60 at the end of each tax year (5th April). A P60 is a form which outlines your employee's total earnings and the taxes they paid over the year.
Your Peace of Mind
Becoming a domestic staff employer can be a daunting process, but with Stafftax you can save time, hassle, and ensure you are being compliant with HMRC. TheStafftax Payroll & HR service makes managing salaries easy and gives you unlimited access to their team of experienced employment experts.
Speak with your consultant at The Lady to get a discount code off your Stafftax Payroll & HR subscription.
◆ You can get in touch with The Lady by Call 020 7379 4717 or emailing theladyrecruits@lady.co.uk
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