The legislation brought in a few years ago in respect of Workplace Pensions has so far only affected large employers. However, it now applies to even the smallest employers who may only have a single employee. All employers, including employers of nannies, are affected by this. The requirements are quite complex and rather bureaucratic and, in keeping with recent trends, failure or lateness in complying with the requirements will mean that the employer may incur substantial penalties which will be levied by the Pensions Regulator.
Whether you need to operate a pension to comply with the automatic enrolment legislation, or whether you want to offer a pension to your employee on a discretionary basis, PAYE for Nannies will be able to help.
With all levels of subscription we can include the necessary pension contributions on the payslip at no extra cost but for those employers wanting more support, we offer a fully managed service that takes the administrative burden away from you.
With our Standard or Premium Payroll & Pension service we take the headache of dealing with the Pensions Regulator and the pension provider away from you. We exclusively use NEST (the national provider set up by the government employee savings trust) as our pension provider. As part of the service we make all of the necessary declarations to NEST each month as well as handling the statutory communications with both the Pensions Regulator and your employee. Payments to NEST are taken by Direct Debit and we will instruct NEST to take payment automatically as part of the normal payroll run.
The rules surrounding automatic enrolment are quite complex but we have summarised the most important details below.
All employers must comply with Automatic Enrolment legislation from the first day of employment.
If your employee is paid above £10,000 gross per annum then you would need to automatically enrol them into a pension scheme regardless of whether they have expressed a desire to be enrolled or not.
If your employee is paid between £6,144 and £10,000 gross per annum, you must offer to set up a pension for your employee. If they then wish to be enrolled into the Workplace Pension, they can make this request and you cannot refuse it. At this level of pay you would need to make employer contributions to the pension.
If your employee is paid below £6,144 gross per annum, you will still be obliged to offer to set up a pension, but you would not have any employer contributions to make at this level of pay.
Regardless of the level of pay, you would need to liaise with the Pensions Regulator, submit a declaration of compliance and issue your employee with the relevant statutory communications.
It is unfortunately not the case that you can ignore the pension regulations because your employee’s pay is below £10,000pa.
After having been enrolled, your employee can opt-out of the pension scheme but this cannot happen until after the enrolment process.