Why Being on Payroll Protects You as a Nanny

Being “on the books” vs being paid in cash

If you’re a nanny, you might have been offered two options:

• “We’ll just pay you cash every month – no need for payroll.”

• Or: “We’ll employ you properly and run everything through payroll.”

They might sound similar (you get paid either way), but they are not the same.

Being on proper payroll protects you – legally, financially and long-term.

1. You’re recognised as an employee with full rights

When you’re on payroll, you’re officially an employee. That gives you legal rights, including (subject to eligibility and length of service):

• Paid holiday

• Statutory sick pay

• Statutory maternity/paternity pay

• Notice periods and protection from unfair dismissal over time

If you’re just handed cash with no payslips, it’s much harder to prove your employment if anything goes wrong.

On payroll = a proper job with documented rights.

2. Clear, fair pay – no nasty surprises

Being on payroll means:

• Your gross pay and hours are agreed in a contract.

• Tax, National Insurance and (where applicable) pension are handled correctly.

• You get a payslip every time you’re paid, showing exactly what you earned and what was deducted.

This protects you from:

• Being underpaid compared to what was agreed

• Confusion around overtime, bank holidays and bonuses

• “Net pay” deals where you end up worse off if the employer’s tax situation changes

With proper payroll, your money is traceable and transparent.

3. Holiday pay and sick pay are properly recorded

Paid holiday and sick pay are not favours – they are entitlements for employees.

On payroll, your employer can:

• Track how much holiday you’ve accrued and taken

• Pay holiday at the correct rate

• Show sick pay clearly on your payslip

If everything is “off the books”, it’s easy for holiday and sick pay to be forgotten, disputed or quietly skipped.

4. It protects your future – mortgages, visas and pensions

Payroll isn’t just about today’s payslip – it affects your future options too.

When you’re on payroll, you have:

• Proof of income for renting, mortgages and loans

• Employment records for visas, residency or citizenship applications

• National Insurance contributions towards your State Pension

• Pension contributions from your employer if you’re auto-enrolled

Cash-in-hand work might feel easier in the moment, but it can leave big gaps when you need to prove your income or work history later.

5. You’re covered if something goes wrong

If there’s ever a dispute – about pay, hours, redundancy or dismissal – being on payroll gives you evidence:

• Contracts

• Payslips

• Employment dates

• Holiday and sick pay records

This makes it much easier to get support, whether through ACAS, a union, or legal advice.

Without that paper trail, it’s essentially your word against your employer’s.

6. It’s safer for your employer too (which helps you)

A lot of families don’t mean to do things wrong – they just don’t realise that nannies are employees.

Payroll protects them from:

• HMRC penalties for not operating PAYE

• Issues around unpaid tax or National Insurance

• Problems if they ever need to prove they’re legitimate employers (for visas, remortgaging, etc.)

When your employer is protected and compliant, your job is more stable. Everyone sleeps better at night.

Where Hirelo fits in

At Hirelo, we built our platform to make all of this straightforward. When a family uses Hirelo to employ you, you get:

• A clear contract and agreed gross salary

• Regular, accurate payslips

• Holiday and sick pay processed correctly

• Tax, NI and pension handled the way it should be

So if you’re ever unsure, you can say with confidence:

“I’m a professional nanny – I should be on payroll, not paid under the table.”

Being on payroll isn’t just a box to tick. It’s how you protect your rights, your income and your future.