Top 10 things to consider when employing household staff
Are you hiring someone to work in your home who isn't self-employed or paid through an agency?
Whether it's a housekeeper, gardener or carer, you are now classed as their employer and have various legal obligations to consider once they accept the job. From deducting the correct tax and offering a pension to running pay slips and administering statutory benefits, here's an overview of what all domestic employers need to know about.
Are you hiring someone to work in your home who isn't self-employed or paid through an agency? Whether it's a housekeeper, gardener or carer, you are now classed as their employer and have various legal obligations to consider once they accept the job. From deducting the correct tax and offering a pension to running pay slips and administering statutory benefits, here's an overview of what all domestic employers need to know about.
1) Employment contract
All employees have legal rights to a written contract within the first two months of their start date. This should cover the job description, salary, sickness and holiday allowance, and termination. As part of our payroll services, Stafftax is able to provide you with a bespoke contract as well as calculate variants such as your employee's holiday entitlement.
You need to set up and run payroll for your employee in order to provide either monthly or weekly pay slips. Stafftax is able to supply these on your behalf as well as assist with any amendments such as overtime and holiday pay. Your employee will also have access to an online members area where they can download their payslips.
3) Net v Gross
What many first-time domestic employers don't know is that you must pay tax and national insurance on top of an employee's net salary. That's why we recommend agreeing a gross salary which accounts for these deductions. You can use our salary calculator to convert a net figure into gross and vice versa. You can read more about net v gross here.
4) Right to work in the UK
You should undertake checks to ensure that the individual is eligible to work in the UK. This can include requesting a copy of their passport or visa.
5) National Minimum Wage
Your employee must be paid at least National Minimum Wage. The current rates as of April 2019 are listed here.
6) Statutory benefits
These include sick pay and maternity pay which all employees are entitled to. Stafftax will take care of all SMP and SSP administration if your employee needs to take maternity leave or sick leave. We will advise you through every stage of the process, continue to run payslips for the employee and provide comprehensive payroll services for any replacement member of staff or temporary cover.
7) Calculating your total cost
It's vital to calculate your total cost beforehand so you don't end up paying money down the line that you haven't budgeted for. On top of your employee's gross salary you will also have to pay Employers National Insurance. You can use our Gross to Total Cost Calculator to help you budget correctly for hiring your employee.
8) Employers Liability Insurance (ELI)
ELI is a legal requirement for all employers to cover damage and/or claimant's costs. If you have home and contents insurance, it's possible that this includes some form of employer's liability insurance for domestic employees. However, if you don't have this, you'll need to buy it separately.
9) Workplace Pension
All employers are legally obliged to offer a pension to their employees if they qualify for a pension scheme. Stafftax offers a workplace pension service which means our dedicated pensions team will automatically enrol new and existing eligible staff into the government's workplace pension scheme on your behalf.
Re-enrolment is the process of putting eligible employees back into a workplace pension scheme and completing a re-declaration of compliance every three years. By signing up to our workplace pensions service, our dedicated pensions team will take care of all your re-enrolment duties for you.