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The following information applies to all domestic staff, including gardeners, cleaners, au pairs, carers and housekeepers

Background checks on nannies

A Working with Children Check (WWCC) or equivalent screening check is required for people working with children, although the requirements and the check name varies between states and territories.

A WWCC obtained for volunteer work does not generally cover paid employment, so check the requirements in your state or territory before employing a nanny.

You can apply online for the relevant check in each state or territory:

QLD , NSW, VIC , SA, TAS,  NT, ACT, WA

It is also recommended that you consider a police check, which can identify matters not covered by a WWCC, such as some driving offences.

If hiring an employee on a working visa, you are required to check their visa status online

Do I need to employ my nanny?

Generally, nannies, housekeepers and most domestic staff or carers are seen by the ATO as employees rather than contractors. This doesn’t mean they can’t be genuine independent contractors.

Each situation needs to be assessed individually.

Whether someone is an employee or contractor needs to be assessed based on the individual circumstances and the actual working relationship.

It is important to get this right, a nanny is not just a contractor because they have agreed to work with an ABN. If someone who should legally be an employee is incorrectly treated as a contractor, the employer may be liable for unpaid employee entitlements and other penalties.

For further information read the ATO website and the ATO’s Myths and Facts page also provides a good summary.

If you do engage your nanny as a genuine contractor, you may still have obligations to pay superannuation and may have workers compensation obligations depending on the circumstances and your state or territory.

What pay rate applies?

The majority, of domestic staff are covered by the Miscellaneous Award ( unless you are in WA)  whilst carers are covered by the Social, Community, Home Care and Disability Services Industry Award.

Generally, nannies are paid at a higher hourly rate than the minimums outlined in the award, its possible to apply all penalties, loadings and allowances into the one flat rate, making processing payroll a simpler process.

This can only be done where the arrangement complies with the applicable minimum entitlements and the employee is better off overall. It is important that any flat-rate arrangement is clearly documented in the signed employment contract.

Employment contracts for nannies

A written employment contract is not essential for an employment relationship to exist. Employees are still covered by the Fair Work Act, the National Employment Standards and applicable modern award.

It is also important to remember that a contract cannot remove minimum employment entitlements. If a contract provides less than the minimum entitlements under the Fair Work Act or applicable Award, the minimum entitlements still apply.

The advantage of the employment contract is that it sets out rights and responsibilities for you and your nanny. It lays out your legal agreement but also helps you and your nanny avoid misunderstandings.

The contract should cover basic pay and conditions outlined in the Award and National Employment Standards

• casual or permanent employment
• hourly rate and superannuation
• hours of work
• sick and annual leave
• notice requirements for leave
• notice periods for termination of employment
• duties and responsibilities.

Do I need PAYG and super for my nanny ?

Generally, you will need to register as an employer with the ATO to withhold PAYG. If you don’t have an ABN already, you will be issued instead with a Withholding Payer Number (WPN). It allows household employers to deduct tax from their nannies pay on behalf of the ATO. PAYG for household employers, is usually due to be paid to the ATO each quarter.

In addition to the above, if you hire  a nanny on the backpacker working visa, you need an extra ATO registration and they are taxed at a separate flat rate of 15%.

The amount of tax to deduct is based on an employee’s tax options as indicated on their TFN Declaration and their gross wages.

Gross Wage = Tax + Net Wages (net wages are payable to employee each pay cycle)

Tax options are mainly as follows

• Claiming OR not claiming the tax-free threshold. Usually, the employee will not claim the tax free threshold with you, if they have a second stream of income. Generally, employees will claim the tax-free threshold for their higher paying income and not claim for second and subsequent incomes streams.

• STSL is a tax collected related to HECS or other Student Loan debts. Payments are made based on threshold earning.

Super is compulsory for both permanent and casual employees once they work over 30 hours per week. It is currently a12% on top of gross wages and paid to the super fund of the employees choice each pay period.

Insurance when you employ a nanny

There are several types of insurance you might need to think about:

• Public liability insurance to cover accidents – discuss insurance options with your exiting household contents insurer.
• Workers compensation insurance –  is a compulsory insurance and penalties apply when the insurance is not in place. The insurance is for when your nanny is injured at work and covers loss of wages and related medical costs. It is state regulated and  contact the workers’ compensation authority in your state or territory for further information.
• Car insurance – you may need to update your car insurance policy if your nanny will be driving your car and ensure that insurer understands that your car will be driven in a work capacity.

How can Domestic Payroll help?

There’s a lot of administration and paperwork involved in employing a nanny.

Domestic Payroll can help families manage the administration associated with employing domestic staff, including payroll, PAYG, superannuation, leave and employment requirements.

Our aim is to make employing a nanny simpler, while helping families meet their employer obligations.