Taking on an assistant lets you mind more children, cover the gaps, and stop turning families away. It also turns you into an employer overnight, and that comes with rules HMRC takes seriously.
The good news is that the admin is manageable once you know the three things you have to get right: registering for PAYE, running payroll properly, and setting up a workplace pension if your assistant qualifies. The trap is the Employment Allowance, which sounds like it should save you up to £10,500 but usually saves a childminder almost nothing.
This guide is for self-employed childminders in England, Wales and Northern Ireland who are thinking about hiring, or who have just taken someone on. It uses 2025/26 figures throughout, and it's written so you know exactly what to do, in what order.
We'll keep it plain. No jargon dumps, no scare tactics.
What does a childminder employing an assistant have to do first?
Before you pay an assistant a penny, you take on a set of employer duties. The headline ones are: check they have the right to work in the UK, give them a written employment contract, register with HMRC as an employer, run payroll, and assess them for a workplace pension. You also need the childcare-specific checks, like an enhanced DBS and the right Ofsted notifications.
In short: A childminder employing an assistant becomes an employer. You must register for PAYE with HMRC on or before the first payday, run payroll each time you pay them, and put them into a workplace pension if they're aged 22 to State Pension age and earn over £10,000 a year. The Employment Allowance rarely helps, because a part-time assistant usually generates little or no employer's National Insurance for it to cancel out.
This guide focuses on the tax and payroll side. The DBS, Ofsted and ratio rules sit alongside it, and you'll already be dealing with those through your regulator.
A quick word on status. If someone genuinely works for you, on your terms, in your setting, they're an employee, and they go on the payroll. You can't simply pay an assistant cash and call them self-employed to dodge PAYE. HMRC looks at the reality of the arrangement, not the label.
How do you register for PAYE as a childminder?
You register with HMRC as an employer, which sets you up to operate PAYE (Pay As You Earn). PAYE is the system for deducting Income Tax and National Insurance from wages and reporting pay to HMRC.
You must register before the first payday so you get your employer PAYE reference number in time. You cannot register more than two months before you start paying people, so don't do it months in advance.
Registration isn't instant. It can take up to about 15 working days to receive your PAYE reference, so leave yourself time. If you genuinely have to pay your assistant before the reference arrives, HMRC's guidance is to run the payroll, keep the records, and send a late Full Payment Submission once you're set up, rather than paying off the books.
Registering as an employer is separate from your own Self Assessment. You stay self-employed as a childminder, file your own tax return as normal, and the PAYE scheme just sits on top to handle your assistant's wages.
What does running payroll for your assistant involve?
Each time you pay your assistant, you run payroll. In practice that means:
- Working out their gross pay for the period.
- Calculating any Income Tax and employee's National Insurance to deduct.
- Calculating the employer's National Insurance you owe on top.
- Working out pension contributions if they're enrolled.
- Giving your assistant a payslip.
- Sending a Full Payment Submission (FPS) to HMRC on or before payday.
You then pay HMRC what you've deducted, usually monthly or quarterly depending on the amounts.
Most childminders use simple payroll software or hand this to their accountant, because the Real Time Information reporting has to be filed every pay run, not once a year. Getting it late or wrong is where penalties creep in.
The thresholds below drive the calculations. They're the 2025/26 figures.
| Payroll figure (2025/26) | Threshold | Rate above it |
|---|---|---|
| Employee's National Insurance (Primary Threshold) | £12,570 a year (£242/wk) | 8% |
| Employer's National Insurance (Secondary Threshold) | £5,000 a year (£96/wk) | 15% |
| Income Tax (Personal Allowance) | £12,570 a year | 20% (basic rate) |
So if your assistant earns under £12,570 across the year and has no other income using up their allowance, they'll usually pay no Income Tax and no employee's National Insurance. But you, as the employer, still owe 15% National Insurance on their pay above the £5,000 secondary threshold. That employer's National Insurance is a real cost on top of their wage, and it's easy to forget when you're budgeting for a hire.
National Minimum Wage applies too. From April 2025 the National Living Wage for workers aged 21 and over is £12.21 an hour, and the rate for 18 to 20 year olds is £10.00 an hour. You can't pay an assistant below the rate for their age.
Do you have to set up a pension for your childminding assistant?
Quite possibly, yes. Automatic enrolment is a legal duty for employers, and it doesn't care how small you are.
You must put a member of staff into a workplace pension, and pay into it, if they:
- are aged 22 up to State Pension age, and
- earn more than £10,000 a year, and
- normally work in the UK.
If your assistant meets all three, you have to enrol them automatically and contribute. If they earn less than that, or fall outside the age band, you may not have to enrol them automatically, but they can sometimes still ask to join, and you may still have to contribute. There's a sliding set of duties, so it's worth checking each assistant's position rather than assuming.
You'll need a pension scheme set up for this. NEST (the National Employment Savings Trust) was created by the government precisely so that small employers always have a scheme they can use, and it's a common choice for childminders. You're not obliged to use NEST, but you do need a qualifying scheme of some kind.
The minimum contributions are a total of 8% of the assistant's qualifying earnings, of which at least 3% must come from you as the employer. The remaining 5% comes from the employee. Qualifying earnings for 2025/26 are the slice of pay between £6,240 and £50,270 a year, not the whole wage, which keeps the numbers smaller than people expect.
You also have ongoing duties: re-enrolment roughly every three years, and a declaration of compliance to The Pensions Regulator. Again, payroll software or an accountant will keep you on top of the dates.
What is the Employment Allowance trap?
Here's where childminders get caught out. The Employment Allowance lets eligible employers knock up to £10,500 off their employer's (secondary) Class 1 National Insurance bill for 2025/26. People hear "£10,500" and assume hiring an assistant comes with a big saving attached.
It almost never works out that way for a childminder, for one simple reason: the Employment Allowance can only reduce your employer's National Insurance. It does nothing for the wages themselves, nothing for Income Tax, and nothing for your assistant's own National Insurance. You can only ever claim it against the employer's National Insurance you actually owe.
A childminding assistant is usually part-time and modestly paid. That means the employer's National Insurance you owe is small, often just a few hundred pounds a year, and sometimes nil. If your assistant earns under the £5,000 secondary threshold, you owe no employer's National Insurance at all, so there's literally nothing for the allowance to cancel out. The "£10,500 saving" evaporates because the bill it offsets was tiny to begin with.
It's worth clearing up two related myths, because childminders often read about them and panic:
- The single-director rule doesn't apply to you. There's a well-known restriction that stops a one-person limited company claiming the allowance. You're a self-employed sole trader, not a company, so that particular rule isn't your problem.
- The domestic-employment rule generally doesn't catch a childminding assistant either. Employers can't claim the allowance for staff doing personal, family or household work for them, like a nanny, gardener or au pair. But your assistant works in your registered childcare business, caring for other families' children, not running your household. That's business employment, so the exclusion doesn't usually bite.
So in principle a sole-trader childminder can often claim the Employment Allowance. The trap isn't that you're banned from it. The trap is that it's worth far less than the headline suggests, because there's so little employer's National Insurance for it to wipe out. Budget for the wage and the pension as real costs, and treat any Employment Allowance saving as a small bonus, not a windfall.
Illustrative example: the real cost of a part-time assistant
Let's put numbers on it. This is an illustrative example using 2025/26 figures, not a real client.
Say you take on Aisha, aged 30, as a childminding assistant for 16 hours a week at the National Living Wage of £12.21 an hour. She has no other job.
- Gross pay: £12.21 x 16 hours = £195.36 a week, which is £10,158.72 a year.
- Her Income Tax: her pay is below the £12,570 Personal Allowance, so nil.
- Her National Insurance: her weekly pay is below the £242 Primary Threshold, so nil.
- Your employer's National Insurance: her pay is above the £5,000 secondary threshold, so you owe 15% on the excess. That's (£10,158.72 - £5,000) x 15% = £773.81 for the year.
- Pension: at £10,158.72 she's over the £10,000 trigger and aged 22 to State Pension age, so you must auto-enrol her. Contributions are based on qualifying earnings of £10,158.72 - £6,240 = £3,918.72. Your 3% is £117.56, and her 5% (£195.94) comes out of her pay.
Now the Employment Allowance. The most it could ever save you here is the £773.81 of employer's National Insurance you actually owe, because that's the only thing it can offset. Not £10,500. And if Aisha worked fewer hours and earned under £5,000, your employer's National Insurance would be nil, so the allowance would save you precisely nothing.
So your true extra cost of employing Aisha is roughly her £10,158.72 wage, plus £117.56 of pension, plus up to £773.81 of employer's National Insurance if you can't claim the allowance against it. The wage is by far the biggest number. That's the honest picture to plan around, and a good payroll setup gets the rest right automatically. If you want to sanity-check your own figures, our National Insurance calculator is a quick way to see the employer's bill.
Is your assistant's pay an allowable expense?
Yes. The wages you pay your assistant, the employer's National Insurance, and your employer pension contributions are all costs of running your childminding business, so they're deductible against your childminding income when you work out your taxable profit.
That's a genuine saving, and it's separate from the Employment Allowance. As a sole-trader childminder you'd typically deduct around 20% to 26% of those costs in tax and Class 4 National Insurance terms if your profits are in the basic-rate band, simply because the expense reduces the profit you're taxed on.
Keep clean records of every wage payment, payslip, FPS and pension contribution. From April 2026, Making Tax Digital for Income Tax starts to apply to higher-income sole traders, and tidy digital records make that transition far less painful. If your bookkeeping already feels like a stretch, our bookkeeping services can take the payroll record-keeping off your plate.
Employing an assistant is one of the clearest signs your childminding business is growing, and it's well worth getting the setup right from day one rather than unpicking it later.
Frequently asked questions
Do I need to register for PAYE if my assistant earns very little?
If you're paying an employee, registering as an employer and operating PAYE is the safe default, and you must do it on or before their first payday. There are limited cases where you don't have to register, for example if you pay below the Lower Earnings Limit (£6,500 a year for 2025/26) and the employee has no other job and no benefits, but you still have to keep payroll records. Because the conditions are fiddly, most childminders register and run payroll properly to stay on the right side of HMRC.
Can I just pay my childminding assistant cash and treat them as self-employed?
No. If someone works for you, on your terms, in your setting, they're an employee, and they belong on your payroll. Mislabelling them as self-employed to avoid PAYE and pension duties is a real risk, and HMRC can pursue unpaid tax, National Insurance and penalties from you as the employer. Get the status right from the start.
Does my assistant have to be auto-enrolled into a pension?
If your assistant is aged 22 up to State Pension age, earns more than £10,000 a year and normally works in the UK, you must automatically enrol them and contribute at least 3% of their qualifying earnings. Below those thresholds the duties are lighter, but they don't disappear entirely, so you should assess each assistant rather than assume they're exempt.
Why can't I save £10,500 with the Employment Allowance?
Because the Employment Allowance only reduces the employer's National Insurance you actually owe, up to £10,500. A part-time, modestly paid assistant generates only a small employer's National Insurance bill, often a few hundred pounds, and sometimes nothing if they earn under the £5,000 secondary threshold. The allowance can't reduce wages, Income Tax or your assistant's own National Insurance, so the real saving is small even when you can claim it.
Does the Employment Allowance domestic-work exclusion stop a childminder claiming?
Usually not. The exclusion applies to staff employed for your own personal, family or household affairs, like a nanny or gardener. A childminding assistant works in your registered childcare business looking after other families' children, which is business employment, so the exclusion generally doesn't apply. The practical limit is simply how little employer's National Insurance there is to claim against.
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Need a hand setting up payroll for your first assistant?
Taking on an assistant shouldn't mean drowning in PAYE filings and pension paperwork. Zmartly sets up and runs payroll for childminders, handles the auto-enrolment, and keeps your records ready for Making Tax Digital. To see how we support childcare businesses, visit our page for childminders, or book a free call to get your assistant set up correctly from day one.
