Why you should never pay your nanny cash in hand
Whether you are trying to save time, money or the headache of dealing with Revenue, you should never be tempted to pay your nanny cash in hand, says Astrid Hamilton from Nanny Payroll. Here, she debunks the most common excuses given.
‘But my nanny is okay with it’
Often young or inexperienced nannies may agree to be paid cash in hand because they are unaware of their legal rights and obligations or they don’t realise the ramifications of agreeing to waive their legal right to things like illness benefit, maternity benefit and holiday leave. Many who start off agreeing to be off the books often change their mind when they grow to understand the implications of a no tax history. Proof of income for a mortgage, for example, is often cited as a reason a nanny will want to be paid on the books. Then you risk losing your nanny, getting reported to Revenue and incurring a huge fine.
‘Everyone else I know is doing it’
The number of people willing to break the law in this way is fewer than you think. Remember when your mammy would say ‘If everyone else stuck their hand in a fire…’ PAYE modernisation means that all tax details for your nanny or childminder much be digitally updated - in line with the rest of Europe. This means that if you hire any kind of home help, you are now required to register online as an employer, and submit weekly or monthly returns on your employee’s behalf. Families who previously paid their nannies cash-in-hand run the risk of facing punitive tax penalties, and possible prosecution.
‘It’s all too complicated’
If you are employing a nanny and you are paying them €40 a week or more, you must register as an employer with Revenue. As an employer you are responsible for deducting the PAYE (tax), PRSI and USC from your employee’s wages. You also must pay employer's PRSI contributions for your employee to the Social Insurance Fund. … When you are paying your employee you must provide a payslip giving details of the PAYE, PRSI and USC that has been deducted. Not to do so is considered fraud and Revenue are increasingly vigilant about this. Nanny Payroll can shoulder this responsibility for you. Contact our team today to find out how we can help.
‘It’ll cost me much more’
While this is true, the amount is not as eye-watering as you would think. Use our free tax calculator to work out the true cost of hiring your nanny. The bottom line is, you can’t afford not to as the alternative is facing a hefty fine and possible prosecution.
‘I’m too far down the wrong track’
It’s never too late to right the books. Contact our team today to find out how we can help. Just tell us your nanny’s official start date and we’ll do the rest.
When you hire a nanny, we can shoulder the hassle of Revenue for you, including Revenue PAYE registration, letters and calls to and from Revenue, monthly payslips securely emailed, holiday entitlements, nanny-shares and tax allowance splitting, setting up a direct debit between you and Revenue. Contact our team today