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information for domestic workers

Current tax thresholds
Your employer must register and deduct NI from your salary if you are paid £153 or more per week. Your employer must also register if you have another job, even if you are paid below the threshold.

If you are paid between £111 and £153 and you do not have another job, your employer should still register with HMRC although no Tax and NI will be due. This will enable you to receive state pension and other benefits. Tax is only deductable if you are paid £192* or more per week and you do not have another job.

Tax and NI payments
If your employer's monthly Tax and NI bill is below £1,500 they only have to pay Tax and NI to HMRC on a quarterly basis.

Payment dates
19 April 2014
19 July 2014
19 October 2014
19 January 2014

Statutory Sick Pay (SSP)
The current rate is £87.55 per week.

Statutory Maternity Pay (SMP)
The first six weeks of SMP are at 90% of average gross weekly earnings. The remaining weeks of the maternity pay period (up to a maximum of 33 weeks) are paid at the lower rate of £138.18 gross per week, or 90% if lower.

Statutory Paternity Pay (SPP)
New fathers are entitled to two weeks' SPP, with a right to a further 13 weeks of unpaid leave. The current rate is £138.18 gross per week.

Statutory Adoption Pay (SAP)
The current rate of SAP is £138.18 gross per week.

Redundancy pay entitlement
Aged between 18 and 21: half a week’s pay, or £225, whichever is lower
Aged between 22 and 40: one week’s pay, or £450, whichever is lower,
Between 41 and retirement: one and a half week’s pay, or £675, whichever is lower
Please note that you qualify for a multiple of the above for every year of continuous employment (for the same employer).

National Minimum Wage (NMW), effective from 1 October 2014
£3.79 per hour gross for employees aged between 16 and 17
£5.13 per hour gross for employees aged between 18 and 20
£6.50 per hour gross for employees aged 21 years and over

Offset allowance per 7-day week: £34.37 (effective from 1 October 2013)

Student Loan Recovery
If you have a student loan and are earning £16,910 gross per year, £1,409.16 gross per month, £325.19 gross per week or more, your employer must deduct student loan repayments form your salary.

*providing you are on a standard tax code

These rates are effective from 6 April 2014. The rates will be updated as and when they become available.

Home Domestic workers benefits of being on PAYE
Benefits of being on PAYE PDF Print E-mail
As an employee on PAYE you have the same rights as any other employee working in the UK and your National Insurance Contributions entitle you to certain state benefits.

Protection Against Unfair Dismissal
If you started work before 6th April 2012 and have been in continuous employment (i.e. working for the same employer) for at least one year you are automatically protected against unfair dismissal. Employees who started work on or after 6th April 2012, gain protection against unfair dismissal after two years of continuous employment.

Statutory Sick Pay (SSP)
As an employee you are entitled to SSP if you are sick for three days or more.

  • Normally the three waiting days do not include non-working days (weekends or days not normally worked)
  • Working days lost prior to SSP commencing are paid at your employer’s discretion
  • Your employer may be able to reclaim some of the costs from the state

Statutory Maternity Pay (SMP)
If you are pregnant and have been working for the same employer for at least nine months prior to the baby’s due date your employer is obliged to administer SMP on your behalf.

If you choose to resume your employment following your maternity leave you are fully entitled to do so, with the same terms and conditions as before. In most cases your employer can reclaim all costs of operating and paying SMP from HMRC.

Statutory Adoption Pay (SAP)
If your are adopting a child you have a right to 26 weeks Statutory Adoption Pay (SAP), providing you have been in continuous employment (working for the same employer) for at least 26 weeks by the date the adoption is approved.

Statutory Paternity Pay (SPP)
Effective April 2003 new fathers are entitled to two weeks' Statutory Paternity Pay (SPP), with a right to a further 13 weeks of unpaid leave. In order to qualify you must have been in continuous employment (with the same employer) for at least 26 weeks (six months).

Redundancy Pay
You are entitled to redundancy pay if you have been in continuous employment for a minimum of two years, providing you are not on a fixed-term contract.

State Pension Contributions
By paying National Insurance Contributions you also qualify for State Pension contributions. The State Pension is divided into two parts:

  • The Basic State Pension
  • The State Second Pension

For more information you can either speak to an Independent Financial Advisor or contact the Pensions Helpline on 0845 3000 168.

Holiday Pay
All employees in the UK are entitled by law to 5.6 weeks holiday per year. For a full-time employee that is 28 paid days off per year, of which 4 weeks (20 days) is standard leave and 1.6 weeks (8 days) is all 8 of the bank holidays. 

BEWARE: You Could Lose Out If Your Employer Cuts Corners!
If your employer does not register for PAYE or if they register but only declare part of your salary in order to save themselves money it will directly affect your full entitlement to the above and other state benefits. Also, remember that you will need evidence of declared income in the form of payslips to get a personal loan, mortgage or provide a financial reference to a landlord.

It is never in your interest to agree to any illegal tax-saving arrangement with your employer!