Parent's obligations

You must comply with the legal obligations of being an employer. This is unless the nanny uses their ABN at which they are self employed.

The legal obligations are ensuring you pay the minimum wage based on a 38-hour working week (before Tax). Or alternatively you pay min hourly rate. For casual employees it is the minimum wage + 25% casual loading.

Meanwhile if you employ a nanny the obligation to pay the minimum wage applies in spite of any benefits (use of car, phone, etc) that may be offered as part of the employment unless agreed as part of a salary sacrifice.

It is important to also be clear on your employees' entitlements. A full-time employee is entitled to a minimum of 20 days annual leave or pro-rata for the hours/days worked. and part time employees receive the same entitlement on a pro-rata basis. Sick leave is 10 days on a pro-rata basis and 11,5% Superannuation.

You are required by law to register with the ATO (Australian Tax Office). This will also allow for income tax deductions. If you find that that side of things is not what you are interested in doing yourself then there are companies that specialize in doing your nanny’s payroll. There are a range of companies but here are two to help you on your search (they are not recommendations just a starting point): www.easypayroll.com.au or www.epayroll.com.au. Alternatively, there are programmes you can purchase and/or freely download that can also help.

Under pay as you go (PAYE withholding), as the employer you may be required to withhold amounts from payments. These amounts are sent to the Tax Office.

For further information contact the Tax Office on 132 866 or www.ato.gov.au

If as a Nanny, they are employed as a contractor then the tax and superannuation is their responsibility. There are some Nanny agencies that employ the nanny on the employer's behalf and take care of all the tax, superannuation and insurance.

If you require further information please contact the ATO on www.ato.gov.au/super or 13 10 20

Insurance requirements

Do you need insurance? Actually, you are required by law to provide Workers Compensation for an employee who is employed in your home.

As the employer you should have liability insurance but it may not be enough and may not cover properly.

Work Cover is the next best place to look for understanding regulations and obligations and the best cover required. Each state has differing regulations regarding Work Cover so we have listed the numbers and links below.

For example: WorkCover Queensland offers insurance called “A Workplace Personal Injury” Insurance policy. The policy is available only to individuals who are deemed to be an “eligible person.” Their insurance is an optional one. It covers you in financial terms to those not covered for workers compensation and a nanny generally falls into that category. The premiums vary as it is based upon your total income.

If you want more information regarding Workcover please contact the individual states:

NSW: www.workcover.nsw.gov.au or call 02 4931 6800/ 13 10 50

Car insurance

If your nanny is going to be using your car then you need to add them to your comprehensive cover.

If your nanny is to be using their own car it is something worth discussing that they have comprehensive cover should your child be transported in their car.