How to set up payslips and start paying nanny taxes (the easy way)

To pay your nanny correctly you need to:

1. Collect their starter info (P45 or starter form).
2. Register as an employer with HMRC and run PAYE each time you pay.
3. Send a payslip every pay period and submit your HMRC report (FPS) on or before payday.
4. Pay any tax/National Insurance due to HMRC by the deadline. Late payments can trigger penalties/interest.

• Best case: they give you a P45 from the previous employer (it shows prior tax paid and their tax code).
• If no P45: use a starter form (new starter checklist) and collect NI number, address, DOB, start date, salary/hours.

With Lily’s: we send your candidate a secure starter form and check the data for you.

Once you hire a nanny, you’re an employer. That means you must run PAYE to calculate Income Tax and National Insurance and report through Real Time Information (RTI).

What we do for you: register you with HMRC, set up PAYE, and prepare your payroll calendar so you know exactly “what to pay and when.”

A payslip must be issued every time you pay your nanny and should include:

• Employee details (name, NI number, tax code, pay date)
• Gross pay, tax, NI, pension contributions
• Any other agreed deductions/additions (e.g., loans, expenses, overtime)
• Net pay (what lands in their account) and your PAYE reference/summary.

Lily’s emails payslips to you and your nanny automatically.

Each pay run, you must file a Full Payment Submission (FPS) to HMRC on or before your usual payday, even if you paid early or late. 

We file your RTI (FPS) for you every time.

After each period, HMRC expects the PAYE/NIC due in full and on time. Late or underpayments can lead to penalties (often starting at 1% after the first late instance) plus daily interest, and further % penalties after 6 and 12 months. 

We send clear “how much and by when” instructions so you never miss a deadline.

Allowed deductions (when agreed/contracted): loans/advances, certain damages per contract, accommodation charges for live-in roles, lateness/absence rules, etc. Additions can include overtime, travel reimbursements, bonuses, holiday pay (if not rolled-up), maternity/medical payments.

Yes. Not operating PAYE correctly is a compliance risk for both employer and employee, and HMRC can levy tax/NIC back-payments, penalties and interest.

• Signed contract and confirmed start date
• HMRC employer registration and PAYE set up
• Starter info (P45 or starter form) collected
• Payroll frequency agreed (weekly/fortnightly/monthly)
• First payslip scheduled and FPS filing lined up
• Pension position assessed (auto-enrolment rules apply depending on age/earnings)

1. Send any overtime/changes to Lily’s
2. Approve the draft summary
3. We issue payslips and submit your FPS
4. You pay your nanny and HMRC by the shown dates/amounts
5. File the confirmation email for your records

• We register you with HMRC, run PAYE & RTI, and email payslips automatically
• Pension assessments/letters handled
• Clear reminders for HMRC payments (what/when/how)
• Friendly humans who know nanny payroll inside out
• Switches from other providers are smooth and fully managed

Hand the admin to Lily’s so you can focus on family, not forms.

We’ll set up your employer account, collect the right info, and run your first payroll, fast.