Some of our customers have been in touch to discuss the implications of NET hourly rates against the new NMW gross rates from April. Each conversion calculation will be different and depend on several factors, including their age, employee tax code in force and the number of hours worked in each pay period. Therefore it is not possible to specify one shoe fits all.

Check your gross equivalent hourly rate: Refer to your payslip, in the top right hand corner under payments it will specify the monthly gross pay. Take this figure and divide by the total number of hours worked in the month. If the result is less than the National Minimum Wage of £11.44 per hour gross, you will have to revise the employee salary.

Example Nanny 1: is over 21 years old & works 30 hours per week at £10 net per hour (30*10=300*52/12 = £1300 net for the month. If we assume her full tax free allowance as 1257L, then her gross equivalent would equate to £1407.78. By reversing this calculation, 1407.78*12/52= £324.87 / 30 = £10.83 per hour gross. In this scenario Nanny 1 is paid less than the National Minimum Wage of £11.44 per hour gross.

Example Nanny 2: is over 21 years old works 40 hours per week at £10 net per hour (40*10=400*52/12 = £1733.33 net for the month. If we assume her full tax free allowance as 1257L, then her gross equivalent would equate to £2026.81. By reversing this calculation, 2026.81*12/52= £467.72 / 40 = £11.69 per hour gross. In this scenario Nanny 2 is paid more than the National Minimum Wage of £11.44 per hour gross.