Your Obligations as an Employer #
According to the Fair Work Ombudsman, when you hire a nanny you are more than likely engaging them as an employee, rather than a contractor. A nanny can operate as a contractor, which means less requirements for the parent, but even if they claim to operate as a contractor they still may meet the definition of an employee. It’s important to know the difference because it will affect your tax and super obligations. The ATO has a decision tool that you can use that makes it easy to work out if you are engaging a carer as an employee or a contractor.
If you are employing a nanny, the Fair Work Ombudsman provides plenty of resources available to meet your minimum workplace requirements and templates for important documents like Contracts, Checklists and Pay Slips.
You must ensure the contract you make with your nanny is comprehensive. This is to ensure there are clear grounds to end an agreement if it doesn’t work out. Take the time to outline all the roles and responsibilities with your nanny, and ensure that expectations are clearly outlined and agreed to on both sides before beginning any arrangement.
Superannuation and Withholding Payments #
If your nanny is an employee, you are required to pay super on top of their wages if they work 30 hours or more per week and receive $450 or more before tax in a calendar month. According to the ATO, you must also register for PAYG withholding for tax purposes.
Fringe Benefits #
If benefits are included in the remuneration arrangement, such as free rent for a live-in au pair, you may need to register for Fringe Benefits Tax.
Minimum Wage and Entitlements #
As mentioned above, it is more than likely that a nanny will be considered as an employee. This means they are covered under the Miscellaneous Wage, which can be viewed here. The Fair Work Ombudsman has an easy-to-use Pay and Conditions Tool (PACT) that works out the required pay and leave arrangements that are specific to your circumstances.
There is an exception to this for parents in Western Australia, as a nanny may be considered as a worker in domestic services in a private home – you should contact Wageline for further information on this matter.
There is a range of minimum workplace entitlements that must be considered when hiring a nanny, which are available on the Fair Work Ombudsman website.
While having a nanny join your beautiful family can make things a lot easier, the legal and financial requirements can be a little heavy. We recommend engaging a domestic payroll provider to ensure you meet all your requirements and spend more time with the ones you love most.
Insurance #
When you employ a nanny, your home becomes a workplace, which means you have the same responsibility as employers in a traditional workplace. It is your duty to provide a safe workplace for carers in your home.
You must get Workers Compensation Insurance to cover your nanny in the event of an accident. insurance is different in Australia for every state and territory:
NSW | QLD | VIC | WA | ACT | NT
For the full list of coverage across Australia, visit the Fair Work Ombudsman here.
If the nanny uses your car, you need to ensure that your CTP policy covers them, and check and allow for additional provisions if they are less than 25 years of age.
Your nanny may also have their own insurance cover, particularly if they’re a contractor.
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