Ask any working parent and most will tell you that any form of childcare takes up a sizable chunk of their budget. There’s a lot to consider when it comes to the cost of a nanny in Australia. That includes paying your nanny’s taxes and super.
It’s a smart move to gather up all the facts before you set off on your childcare journey. You may be asking yourself, “How much should I pay a nanny?” If so, read on for the low-down.
Be Clear about Your Childcare Needs
How many hours a week you need a nanny for will be one of the determining factors. For example, you may only need someone to pick up and drop off your kids at school.
The type of nanny you prefer will also play a part in how much you pay. Some families choose to hire an au pair or demi pair. This may mean having someone living in. In this case, you’ll be able to offset the cost of board and lodging against the salary you pay.
You may be setting your sights on trying to retain the same nanny for a number of years. Experience and training may also be high on your ‘must-have’ list. You might also prefer not to have your nanny living with you.
All these things matter and will affect the size of your nanny’s salary.
Taxes, Super and Pay as You Go (PAYG)
In the majority of circumstances, you will be hiring a nanny as an employee rather than a contractor. That means you will have certain obligations such as registering for PAYG and withholding tax.
You may also have to pay a super contribution on top of your nanny’s wages regardless of how you use your paid nanny hours.
This will apply when your nanny works 30 hours or more per week. They must also be receiving $450 or more before tax in any calendar month. As the employer, your contribution would be 10 percent (and this will increase to 12% by 2025).
The Typical Hourly Rate for a Nanny in Australia
- The number of hours worked
- The level of responsibility you are expecting
- Your nanny’s experience
The rate will also partly rest on whether the role is a genuine cultural exchange or study arrangement.
Market rates will play into the size of your nanny’s salary. You will always have to pay a highly trained live-out or experienced live-in nanny above the minimum award. At the moment, this would be around $30 per hour on average, plus super.
For a more junior nanny, the rate could be as low as $20 per hour. In all cases, the hourly rate may increase for having to work overtime, on public holidays and at weekends, especially on Sundays.
Overtime rates can vary depending on the number of continuous hours. For example, the hourly rate for 1 extra hour may be less than it is for 4 hours in a row.
Other dependencies are whether the overtime takes place outside the hours of 0700 and 1900 or if it takes the nanny beyond 38 hours per week.
Sharing a Nanny
One way to reduce the cost of hiring a nanny is to consider a nanny share with another family or families. Apart from the financial savings, there may be other benefits for your child, particularly if they have no siblings.
This is because they will play and learn with the other children your nanny takes care of. You’ll find that many nannies are flexible and enjoy working for lots of families at the same time.
You must talk about your expectations with the nanny and other parents before committing yourself. Make sure that you write down all agreements in a contract.
It’s always wise to employ the services of a nanny payroll company such as
Pay the Nanny. This helps avoid any problems or disputes with those you plan to share the nanny with.
Other Nanny Extras
Like all employees, nannies have an entitlement to leave benefits such as holiday and time off when they’re ill. You may also expect your nanny to use your car. If so, make sure your insurance policy covers them, particularly if they are 25 or under.
If you are hiring a nanny as an employee, you must make sure you have sufficient Workers Compensation Insurance. This covers you and your nanny should they have an accident in your home.
Insurance varies across Australia in every state and territory. You can
find out more information
here about the rules where you live.
Contact Pay the Nanny Now
As a parent employer, it is always best to seek professional advice from the experts. Our nanny payroll service does everything for you regarding set up, submitting payroll to the ATO and super.