Always insist on a gross wage with your employer
Why are net-wage agreements still so common in domestic employment, especially when you bear in mind the financial implications at stake.
Many domestic employees and domestic agencies still discuss salaries in terms of net (i.e. take-home) and consequently many domestic workers have net-wage agreements with their employers. Although it is understandable that what you are ultimately interested in is how much money you have in your pocket at the end of each week or month, the reality is that you are always paid a gross wage, with tax and National Insurance Contributions paid to HMRC by your employer on your behalf. By insisting to discuss your salary in terms of net you could actually be doing yourself a disservice, as many employers end up considering the tax and NI contributions as additional costs, whereas they are actually part of your gross wage.
Domestic employment is most certainly the only profession left in the UK where wages are still commonly agreed on the basis of net (i.e. take-home) pay. It is surprising that this outdated arrangement has not yet been dispensed with, as there are considerable financial implications at stake. The following points briefly explain why a net pay agreement is disadvantageous to all domestic employees
- The Government regularly increases the personal tax-free allowances and has cut the basic rate of income tax several times in recent years. If you have a net pay deal your employer does not have to pass any of the savings on to you. Only if you are on a gross wage will you automatically receive the benefit of any cuts by paying less tax and NI
- A gross wage enables you to compare your salary with any other type of employee in the UK, thereby giving you an opportunity to assess your earning power and consider your career options.
- A gross wage agreement is also essential if you want a to get a personal loan or a mortgage, as the figure the bank or building society will be interested in is your gross salary. Similarly, if you want to make sure you are being paid the National Minimum Wage, you need to know what your gross salary is
- As long as net-wage agreements remain the norm the number of domestic workers with incorrectly declared salaries will continue to soar, and you will ultimately lose out as your statutory entitlements will be affected
information for domestic workers
All domestic employers in the UK are required by law to pay at least the National Minimum Wage (NMW). It is a criminal offence for an employer to pay below the NMW, carrying a fine of up to £5,000 on conviction, unless you're living as part of the family household (i.e. without separately metered accommodation). For current NMW rates, please refer to our rates and thresholds page.
- You can check if you are above the NMW from the payslips your employer should be providing you with. Simply divide your gross weekly wage by the number of hours you have worked to calculate your hourly wage
- If you think that your employer is not paying the NMW you are also entitled to inspect the tax records they keep for your employment. They must give you access to these within 14 days of receiving a written request from you, but this should only be your final course of action after more friendly and informal communication between you has broken down
Domestic employees are exempt from the measures concerning working hours but are entitled to a 20 minute rest break for every six hours worked.