Do I need to pay my nanny through PAYE if I only employ them part-time?

Yes, if your nanny works for you on a regular, ongoing basis, PAYE applies regardless of whether the role is part-time or full-time. The only exception is if you pay them below the National Insurance Lower Earnings Limit (129 pounds per week / 6,240 pounds per year for 2026/27). You cannot avoid PAYE obligations by keeping hours low if the working pattern and control indicate an employment relationship exists.

What is the minimum wage I must pay my nanny?

You must pay your nanny at least the National Minimum Wage or National Living Wage depending on their age. From 1 April 2026, the National Living Wage for workers aged 21 and over is 12.71 pounds per hour. For 18-20 year olds the rate is 10.85 pounds per hour. For 16-17 year olds it is 8.00 pounds per hour.

Can I pay my nanny in cash to avoid registering as an employer?

No. The method of payment is irrelevant to your PAYE obligations. If your nanny is legally an employee, you must register as an employer and operate PAYE regardless of whether you pay in cash, by bank transfer, or any other means. Paying cash without operating PAYE and National Insurance is tax evasion.

When do I need to enrol my nanny into a pension?

Your auto-enrolment duties begin on the day your nanny starts working for you. If they are aged between 22 and State Pension age and earn more than 10,000 pounds per year, you must automatically enrol them into a qualifying workplace pension. You must also complete a Declaration of Compliance with The Pensions Regulator within five months of your duties start date.

Do I need employers' liability insurance for a nanny?

Yes. As soon as you employ someone, you are legally required to hold Employers' Liability Insurance with a minimum of 5 million pounds of cover. Check your existing home insurance first, as some policies include this. If not, specialist domestic employer policies are available. Failure to hold valid cover can result in a fine of up to 2,500 pounds per day.

What happens if I get my nanny's PAYE wrong?

HMRC can charge penalties for late or incorrect RTI submissions, late payment of PAYE, and failure to deduct the right amounts. If HMRC investigates and finds underpayments, you can be required to pay back tax and National Insurance plus interest and penalties.