Types of employment
Live-in staff:
A live-in employee lives as part of the family household. If you provide them with their own accommodation (with a separate front door and separate metering for gas, water and electricity) you may have to report this as a taxable benefit. Domestic staff who live as part of the family are exempt from the National Minimum Wage.
Daily/Live-out staff:
Live-out staff live separately from the family and pays for their own accommodation. They work set hours as stipulated in their contract.
Part-time:
If your employee works for you on a part-time basis and you pay them less than £100 per week, but they have another job that brings their total earnings above the weekly threshold, you will have to register as an employer and pay tax and NIC on their behalf. Bear in mind that if you fail to comply with your responsibilities as an employer it is you HMRC will penalise, not your employee. Always find out if your employee has another job and ask them to put this in writing.
Temporary:
You must pay your employee’s tax and NIC even if they’re only employed by you on a temporary basis. Generally speaking domestic staff do not fit HMRC criteria for self-employment status and so it is your responsibility as their employer to ensure that tax and NICs are deducted from their salary. In some cases domestic agencies put temporary staff through their own payroll, but you need to find this out. If your employee claims to be self-employed make sure by getting written confirmation from their tax office.