We have received the following information from nanny tax – although reference is made to nannies, the same thresholds also apply to au pairs.

This means, that if your au pair earns more than £107/week, her/his pay would need to be declared through HMRC – tax contributions are not payable until the au pair earns more than £144.

This information is therefore particularly important for families who have mother’s help candidates with higher weekly pay.

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An employer who pays their nanny more than £107/week gross or net (from 6th April 2012) will have to declare her salary through HMRC. A nanny will start to pay tax on earnings over £156/week (from 6th April 2012) and employers will start to pay employer’s NI on a salary over £144/week. However employers must still declare a nannies salary that is over £107/week as the nanny will be contributing to her statutory entitlements such as pensions credit, job seekers allowance, statutory maternity pay etc.

An employer who pays their nanny less than £107/week will not have to declare her salary – as long as the nanny has 1 job. If the nanny has more than 1 job and is earning less than £107/week, the employer must declare her salary through HMRC.

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Source: Kirsty, Nannytax, http://www.nannytax.co.uk/