Having a nanny join your family can make life a lot easier, but there are a few financial and legal requirements that you must consider before taking the plunge. In this article, we’ll discuss the minimum wage, payment of superannuation, taxation and fringe benefits that must be taken into account when hiring a nanny in Australia.
Minimum Wage and Entitlements
The minimum wage and entitlements for nannies in Australia are determined by the Miscellaneous Wage. This wage is applicable for employees who do not have an award or agreement that covers their work.
Under the Miscellaneous Wage, the minimum wage for nannies is set by the Fair Work Commission. The Fair Work Ombudsman’s Pay and Conditions Tool (PACT) can be used to calculate the required pay and leave arrangements specific to your circumstances.
In Western Australia, a nanny may be considered a worker in domestic services in a private home. If this is the case, contact Wageline for further information.
The Fair Work Ombudsman website also provides a range of minimum workplace entitlements that must be considered when hiring a nanny. These include:
- Paid annual leave;
- Personal/carer’s leave;
- Public holidays;
- Annual wage increases;
- Superannuation;
- Anti-discrimination laws; and
- Long service leave.
Payment of Superannuation
If your nanny is an employee, you are required to pay superannuation 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.
You must also register for PAYG withholding for tax purposes. This is required by the Australian Taxation Office (ATO).
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. Fringe Benefits Tax (FBT) is a tax paid by employers on certain benefits they provide to employees.
Conclusion
Hiring a nanny can be a great way to make life easier, but there are a few financial and legal requirements that you need to consider. It is important to make sure you pay the minimum wage and entitlements, as well as superannuation and FBT if applicable.
We recommend engaging a domestic payroll provider to ensure you meet all your requirements and spend more time with the ones you love most.
