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  • Writer's pictureNannyTax

4 Reasons To Agree A Gross Salary With Your Next Nanny Employer

In this guest blog by Nannytax we look at the difference between net and gross salaries and find out why you should agree a gross salary with your next nanny employer.

So, what is the difference between a gross and net salary?

The term gross salary refers to the amount that an employer pays their nanny before any deductions, such as tax or national insurance contributions, have been made.

Whereas the net salary refers to the amount the nanny physically receives, after these deductions have been made. This is often referred to as the “take home pay”.

With that in mind, why is it better to agree a salary in gross terms?

There are many reasons as to why agreeing a gross salary is more beneficial.

Easy comparison

Nannying is one of the only industries where some individuals still talk in net terms. Making it difficult for nannies to compare their salary against other roles, or even other industries.

Tax free allowance

The tax-free personal allowance is the amount of money you can earn each year, before incurring tax. This allowance is usually increased by the Government each April and you can view the latest rates on the Nannytax website. This is due to change again in 2021.

Nannies who have agreed a gross salary with their employer, will automatically benefit from any increase to the tax-free personal allowance. Resulting in an increase to their take home pay.

However, for those on a net agreement it is the employer, not the nanny, who will benefit from any increase to the tax-free personal allowance.

Mortgage and loans

When applying for financial support, such as a mortgage or loan, you will be asked to as provide evidence of your gross annual salary. This can be slightly trickier if you are on a net salary as you may not have this information to hand.

Job stability

Agreeing a gross salary with your employer supports job stability, as the employer will have a more accurate idea of the total costs involved from the outset of the employment. As a gross figure accounts for your tax, national insurance, pension contributions and any student loan deductions (as applicable), that are due on your earnings.

For more information on Going Gross and why it is recommended, check out the following pages:

Little Steps Nanny and Events Agency current vacancies and jobs are always advertised in Gross. We fully support the #gogross campaign to bring the nanny profession in line with any other profession and career. We advise all of our clients in gross too.

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