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When you hire a carer to work in your home, you’re not just arranging personal support, you’re stepping into the role of employer. That means managing payroll, tax, pensions and employment obligations. Paying your carer cash-in-hand might seem simpler, but it often brings hidden risks. Here are the main reasons why you should avoid this approach.

You Must Report Earnings to HMRC

Paying cash may seem informal and not necessarily illegal, but if your carer is working for you and earning above the lower earnings limit (£120 a week), you are legally obliged to report these earnings to HMRC. This is a lot easier to do if you have set your carer up on a PAYE scheme. If you don’t declare these earnings to HM Revenue & Customs, you could face penalties. Even if the income is small, for example if they are earning below that lower limit, but they also have another job, it still needs to be reported – and if you don’t do so, you could be fined.

Your Carer Misses Out on Benefits and Rights

If you pay cash-in-hand and don’t run formal payroll, your carer may miss entitlement to statutory benefits — for example, pension contributions, sick pay, maternity/paternity pay, or the ability to provide evidence of employment (such as payslips) when they need it for things like a mortgage or other financial checks.

You Increase the Risk of Tax and National Insurance Underpayments

If wages aren’t properly declared, HMRC can issue underpayment letters for tax or National Insurance contributions that were not correctly handled. These could fall upon your carer, or worse, you as the employer might become liable for unpaid contributions and penalties.

Cash Transactions Affect Trust and Transparency

When payments are made off-the-record, it becomes difficult to substantiate what was paid, when and how. That open-book transparency is especially important if employment terms change, or disputes arise. A formal payroll arrangement supports clarity, professionalism and good employer-employee relations.

How A Specialist Payroll Service Saves You Time and Worry

Given the above risks, many home care employers choose to use a specialist payroll provider for their carer. Here’s why it makes sense:

• Everything is handled correctly: tax, NI, pension auto-enrolment, payslips and year-end documentation.
  
• You reduce the chance of HMRC penalties.
  
• Your carer gets the rights and record-keeping they deserve — and you get peace of mind.
  
• You stay focused on the care being given — not the bureaucracy of cash payments.
  

In Summary

Bringing a carer into your home is a big step and one that comes with important payroll and employment-related duties. While paying cash under the table might feel simpler, it’s full of hidden risks for you and for your carer. By adopting a formal payroll process from the start, you protect both parties, ensure legal compliance and build a more professional home-employment relationship.

If you’re looking to bring a carer into your home to support a loved one, it’s an important decision — both personally and professionally. The demand for quality in-home care is rising, and when you’re becoming the employer, there’s a lot to consider beyond simply finding the right person

1) Identify Your Needs Clearly

Begin by assessing exactly what kind of support is needed. Do you require someone for general assistance around the home? Or does the role involve personal care, mobility support, medical tasks or specialist needs? Defining the hours, tasks and skills needed will help you find the right carer.

2) Explore Your Options

Look into the different ways of engaging a carer: using an independent self-employed carer, via an agency, or by becoming a direct employer yourself. Investigate local providers or directories, ask for recommendations from professionals or friends, and check relevant registrations or certifications.

3) Set Your Budget

Setting a budget and salary isn’t just about the carer’s hourly or daily rate. You’ll need to consider tax, National Insurance (NI), pension contributions, holiday pay, and possibly agency fees or other overheads like transportation or specialised equipment costs. Look into whether you have any options available, such as personal savings, government assistance programs, or long-term care insurance. Once you’ve decided on your salary, you may want to consider investing in a payroll service to help you manage these costs accurately.

4) Interview and Shortlist Candidates

Once you’ve identified potential carers, arrange interviews. Ask about their experience, qualifications, availability and how they handle specific tasks or medical conditions. Compatibility with your household and the care recipient is also key.

5) Conduct Checks & Review References

Obtain references from previous employers or clients, and contact them to verify reliability, punctuality and performance. It’s also wise to conduct background checks such as a DBS check to ensure the carer has no criminal record. 

6) Clarify Employment Terms & Payroll Setup

As the employer, you’ll need clear contracts or agreements covering pay rate, hours, duties, holiday entitlement and notice-period, along with your payroll arrangements. Decide whether you are running payroll yourself or using a payroll provider. Ensure you understand your obligations: payslips, tax/NI deductions, pension auto-enrolment, and year-end filings. Getting this right from the start avoids problems later.  You may wish to consult with a legal adviser on this.

7) Begin with a Trial Period

When you appoint a carer, it’s helpful to build in a trial period. This allows you and the carer to assess how the role works in practice — how the carer fits with the person being supported and how the hours and tasks align. Review the arrangement after the trial and adjust as needed.

8) Ongoing Management & Communication

Once the arrangement is in place, maintain regular communication with your carer. Set up agreed ways to track changes in duties or health needs, and ensure payroll is handled promptly and accurately. Conduct periodic reviews to ensure everything is working smoothly. A clear and consistent administrative process underpins a calm and effective care relationship.

9) Use Support Networks & Specialist Help

As the employer of a carer, you’re operating in a somewhat specialist space — part-care provider, part-employer. It makes sense to plug into support networks, ask for advice from payroll or employment-law specialists, and consider using a dedicated payroll service tailored to carers. These networks and services can simplify your role and reduce risk.

Final Thoughts

Bringing a carer into your home is a meaningful step — one that can greatly enhance care and quality of life. But as you take on the employer role, it’s crucial to plan not only for the person you hire but also for the payroll, tax, employment-law and administrative responsibilities that go along with it. By being clear about your needs, choosing the right carer, and arranging reliable payroll support from day one, you’ll set the foundation for a positive and professional relationship.

Inviting a carer to work in your home can make a world of difference, providing vital support, independence, and peace of mind for you or your loved one. Whether you’re arranging full-time live-in care or part-time support, it’s important to understand what the role involves and the professional responsibilities that come with it.

A carer’s job is deeply personal. It’s built on trust, compassion and consistency, qualities that help ensure the person being cared for feels safe, respected and well-supported every day.

Personal Care and Daily Support

One of the most central aspects of a carer’s role is assisting with personal and practical tasks. Depending on individual needs, this can include:

• Helping with washing, dressing, and grooming
  
• Supporting mobility and transfers around the home
  
• Assisting with toileting and continence care
  
• Preparing and helping with meals and hydration
  
• Administering or prompting medication
  

These daily routines can have a huge impact on comfort, confidence, and overall wellbeing. A good carer will carry out each task sensitively, maintaining dignity and independence wherever possible.

Companionship and Emotional Wellbeing

Beyond the practical tasks, many carers also play a key role in emotional support. They offer company, conversation, and reassurance, especially for those who might otherwise feel isolated.

A carer’s presence can bring structure to the day, create meaningful engagement through shared activities, and build a trusted relationship that benefits both mental and emotional health.

Domestic and Household Assistance

Carers often help to keep the home running smoothly. This might involve light household duties such as laundry, tidying, cleaning, or shopping.

These tasks aren’t about the carer becoming a de-facto housekeeper, but about maintaining a safe, clean and comfortable environment, one that supports health and dignity.

Monitoring and Reporting

Carers are often the first to notice subtle changes in wellbeing, for example, a shift in appetite, mood, mobility or behaviour.

Their role includes observing and reporting these changes to you, family members, or healthcare professionals so that care plans can be adapted quickly if needed. Good communication between you and your carer is essential.

Professionalism and Reliability

While compassion is at the heart of care, professionalism underpins the relationship. A carer should:

• Arrive punctually and respect agreed working hours
  
• Follow the care plan and maintain confidentiality
  
• Comply with health and safety standards
  
• Communicate clearly and honestly about progress or challenges

Ultimately, successful care is built on respect and clear communication. Taking time to discuss expectations, boundaries, and preferences from the start helps foster a strong partnership, one where both you and your carer feel valued and supported.

In summary

A carer’s role goes far beyond practical assistance. They provide stability, emotional support, and dignity to the person they care for. By understanding these responsibilities, and by ensuring you meet your own obligations as an employer, you can create a safe, positive and professional care environment at home.

If you’re bringing a carer into your home, you might think managing payroll yourself is straightforward — after all, it’s just one person, right? But in reality, running payroll properly involves more than simply paying wages. Attempting a “do-it-yourself” payroll approach can lead to unexpected complications. Here are four of the biggest challenges domestic employers often face.

Keeping Up with Deadlines

As an employer, whether for one carer or more, you must operate a PAYE scheme. You’ll need to submit various reports to HM Revenue & Customs (HMRC) on time. However, an external report for HMRC noted that understanding of these deadlines was the biggest challenge for small employers, given they generally have limited knowledge of the processes surrounding PAYE.  

The submissions you’ll need to make include:

• A Real Time Information (RTI) Full Payment Submission (FPS) on or before each payday.
  
• A  Real Time Information (RTI) Employer Payment Summary (EPS) which is sent by the 18th of the following month, if you haven’t paid anyone in a given tax month.
  
• A P11D (the employee’s expenses and benefits), which must be reported to HMRC by the 6th of  July.
• A P60 which must be submitted annually and then sent to the employee by 31 May.
  
• When the carer leaves you must tell HMRC the leaving date, submit their final payslip, submit a P45,  and provide the employee with their part of the P45, which must be done on their final day of employment. 

Miss any of these deadlines and HMRC may fine you up to £200.

2. Submitting Accurate Information

Even when you meet the deadlines, doing the filing accurately is absolutely critical. Incorrect figures will lead to HMRC holding different numbers than the sums paid, and this can trigger a bill for additional tax, with daily interest applied. The employee may also underpay their tax, but you would be at fault and liable to pay to rectify the error.  However, it’s easy to make mistakes if you’re doing it yourself without regular payroll experience.

3. Dealing with Failed Submissions

Your submission might fail for many reasons: wrong filing period, system glitches, cancelled payroll schemes, or accidentally submitting an EPS on the incorrect date.

For a domestic employer who doesn’t have a dedicated payroll team with the knowledge to understand the error codes shown, sorting these errors can be time-consuming and stressful, especially if you’re also managing daily care responsibilities.

4. Lack of HR & Employment-Law Backup

When you hire a carer, you’re not just paying wages — you’re effectively becoming an employer. That means employment law, pensions, holiday pay and more. Many domestic employers don’t have an HR department, and so may not keep up with legal changes or ensure full compliance.  For example, missing pension auto-enrolment or failing to provide proper breaks could put you at risk of tribunal claims. Being a “home employer” doesn’t exempt you from responsibilities.

Why Outsourcing Payroll Makes Sense

Given these risks, many household-employers choose to outsource their payroll to a specialist bureau.

When you hire a carer, what you often want most is peace of mind: knowing that payroll will be handled correctly so you can focus on the care environment rather than compliance paperwork.

Here’s what a good payroll service offers:

• Reliable submission of FPS/EPS etc on time.
  
• Accurate calculations of tax and National Insurance contributions.
  
• Fewer surprises — less risk of HMRC fines or under-payments.
  
• More time for you to concentrate on the care role and household management.

We offer a Payroll and HR service, which not only provides an end-to-end payroll solution but also unlimited HR support. Employers who subscribe to uswill also receive a free bespoke contract created by our specialist HR advisors to suit the needs of the employer and their employee. We further offer a pension service, as well as the option for us to make the salary and HMRC payments on the employer’s behalf.

In Summary

Hiring a carer to work in your home is a big responsibility — and becoming their employer adds a layer of payroll and legal obligations. Going it alone might feel simple at first, but the deadlines, accuracy demands, and legal implications make DIY payroll a riskier path than many think.

If you want to ensure everything is handled properly and reduce stress, outsourcing payroll to a specialist service is often the wisest move. It helps you meet your obligations without losing sleep over the details.