Casual vs Permanent Nanny: Which Employment Type Is Right for Your Family?

Deciding how to employ a nanny is one of the first real decisions a family makes once they've found the right person for the job. Do you engage them as a casual, or bring them on as a permanent part-timer? It sounds like a small administrative choice, but it actually shapes pay rates, leave entitlements and your obligations under Australian employment law. Get it wrong and you could be underpaying your nanny without realising it, or paying more than you need to.

The confusion is understandable. Plenty of families assume "casual" simply means flexible and cheap, while "permanent" sounds like a bigger commitment reserved for full-time roles. Neither assumption holds up once you look at how Fair Work actually defines these categories.

What counts as a casual nanny

A casual nanny is someone you employ without promising them ongoing work in advance. You offer shifts as you need them, and your nanny is free to accept or turn them down. Because casual employees miss out on paid leave, they're paid a higher hourly rate through what's known as casual loading, which is designed to compensate for that gap.

Here's the part families often miss: calling someone casual in a contract doesn't make them casual in the eyes of the law. The Fair Work Ombudsman looks at the real nature of the working relationship, not just the label attached to it. If a nanny works the same days every week with a genuine expectation that the arrangement will continue, that pattern points toward permanent employment regardless of what the paperwork says.

What counts as a permanent nanny

Permanent employment can be full-time or part-time, and most nannies fall into the part-time bracket because they tend to work set hours across the week rather than a standard 38-hour roster. A permanent nanny receives paid annual leave, paid personal leave (covering sickness and carer's responsibilities), and the other protections set out in the National Employment Standards. In exchange for these entitlements, the hourly rate is generally lower than a casual rate, since the leave is being funded separately rather than folded into pay.

The real test: certainty of ongoing work

The clearest way to tell the two apart isn't the number of days worked, it's whether there's a firm, ongoing expectation of future shifts. A nanny rostered on Monday to Thursday, 8am to 4pm, every week of the school term, looks permanent. A nanny who's called in occasionally to cover school holidays, date nights or unexpected gaps in care looks casual. Working only two or three days a week doesn't automatically mean casual either; plenty of permanent part-time nannies work exactly that pattern.

Leave entitlements make the biggest practical difference

This is usually where families feel the impact most directly. A permanent nanny is entitled to paid annual leave, paid personal leave, compassionate leave, family and domestic violence leave, and superannuation where it applies. A casual nanny generally doesn't receive paid annual or personal leave, paid redundancy, or notice of termination, though they retain access to certain unpaid leave and other workplace protections. The trade-off is the casual loading built into their pay rate, which under many awards and for award-free arrangements sits around 25%, though families should always confirm the figure against the applicable award (see the Fair Work Ombudsman's guide to casual employees).

Which arrangement actually costs less

This is where the "casual is always cheaper" myth falls apart. A higher hourly rate sounds more expensive on paper, but it exists precisely because it replaces the value of leave a permanent nanny would otherwise accrue. If your nanny works consistent hours all year, the total annual cost between casual and permanent arrangements can end up surprisingly close, and in some cases casual employment ends up costing more once the loading is factored in against hours worked.

Common misconceptions worth clearing up

A few beliefs come up again and again with families we speak to. "Casual is always cheaper" isn't necessarily true once regular hours are factored in. "We agreed it would be casual, so that settles it" doesn't hold up, because employment status is determined by the actual working relationship rather than the wording of a contract. And "it's easy to change later" is true in principle, but the switch needs to be documented properly and handled in line with Fair Work requirements, not just agreed verbally over a coffee.