Special Employment Situations

If you employ harvest workers, domestic staff like nannies or housekeepers, or au pairs, you may have different payroll obligations than those for standard employees. Some casual arrangements allow simplified reporting, but many require full PAYE compliance, including register...

Introduction

Domestic Staff: Nannies, Housekeepers, and Gardeners

You become an employer when you hire someone to work in your home — such as a nanny, housekeeper, or gardener — if you hire them directly and they're not self-employed or paid through an agency.

Your Responsibilities as a Domestic Employer

When you employ domestic staff, you must:

Check they have the legal right to work in the UK
Register as an employer with HMRC
Obtain employers' liability insurance
Set up and run payroll, or pay someone to do this for you (even if you pay in cash)
Deduct and pay Income Tax and National Insurance contributions
Pay statutory benefits such as Statutory Maternity Pay and Statutory Sick Pay when eligible

You cannot ask your employee to become self-employed to avoid these obligations.

Employee Rights for Domestic Staff

Anyone you employ at home must receive:

An employment contract
Payslips
At least the National Minimum Wage
Not be required to work more than the maximum hours allowed per week

If they meet eligibility requirements, they're also entitled to paid holiday, redundancy pay, and access to a workplace pension.

Special Consideration for Childcare

If you employ a nanny and you're eligible for Tax-Free Childcare, you can use your childcare account to pay their Income Tax and National Insurance contributions.

Carers and Personal Assistants

You're classed as an employer if you pay a carer or personal assistant directly, even if you receive money from your local council (known as 'direct payments') or the NHS to pay for them. All the standard employer responsibilities apply.

Your local council can direct you to organisations that can help with your employer responsibilities, including recruiting and paying your carer.

Au Pairs

Au pairs are entitled to the National Minimum Wage and National Living Wage. They may have to pay Income Tax and National Insurance depending on how much they earn.

Hiring an Au Pair

You can hire an au pair if they:

Are from the UK or Ireland
Are from an EU country and have settled or pre-settled status under the EU Settlement Scheme, or are eligible to apply
Have a Youth Mobility Scheme visa

You must not hire an au pair if they're in the UK on a visitor visa or visiting for 6 months or less. Always check the au pair's visa conditions before hiring them.

Au pairs from the EU, Switzerland, Norway, Iceland, and Liechtenstein needed to have been living in the UK by 31 December 2020 to apply for the EU Settlement Scheme. The deadline was 30 June 2021, though late applications are accepted with 'reasonable grounds' such as illness or domestic abuse.

Paying Au Pairs

When calculating whether you're meeting National Minimum Wage requirements for au pairs, accommodation provided by the employer must be taken into account. You're responsible for keeping records that prove you're paying at least the minimum wage.

Harvest Workers and Casual Beaters

Special rules apply for harvest workers and casual beaters that can simplify your payroll administration, but these workers' pay remains taxable income.

When You Don't Need to Deduct Tax

You don't have to deduct tax from harvest casuals or beaters if:

You take them on for one day or less, pay them at the end of that period, and they have no contract for further employment
They work for 2 weeks or less and haven't worked for you since 6 April and been paid above the PAYE threshold without PAYE being applied
They work on a daily paid casual basis (for example, one or 2 days a week) and this is not expected to exceed 14 days total in any tax year

If daily paid casual work exceeds 14 days total in any tax year, you must operate PAYE, deducting tax and National Insurance as normal.

When You Must Use PAYE

You must pay part-time or casual employees through PAYE, deducting tax and National Insurance as normal, if any of the following apply:

They work with you for more than 2 weeks
They work on things other than harvesting or shoot beating
They are a member of your family

National Insurance for Harvest Workers

For casual beaters, any National Insurance contributions (NICs) must be calculated as normal.

For harvest casual workers who meet specific conditions (no contract of employment, engaged irregularly, working outdoors harvesting perishable crops, paid at the end of each job), you must deduct NICs when earnings for each job exceed the Secondary Threshold for employers and the Primary Threshold for employees.

Where earnings for each job are below the Lower Earnings Limit (LEL), no NICs are due. You only have to report earnings below the LEL where no return is required for tax.

Record Keeping

You must keep a record of each person you pay, even if you don't have to run a payroll. These records must include:

Full name
Date of birth
Gender
National Insurance number
Address
How much you pay them

Reporting Requirements

You normally need to include casual workers' information on your payroll and report it to HMRC on or before their first payday. However, if you pay employees based on work done on the day (for example, harvest casuals paid by how much they pick), you're allowed to report these payments within 7 days of paying them. When reporting payments this way, you must enter late reporting reason code F against each payment reported late.

Sources

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.