What Happens When Your Nanny Resigns?

Your nanny hands in her notice, and suddenly you're juggling two things at once. There's the obvious one, finding care for the kids. Then there's the part that tends to get rushed: making sure her final pay is done properly.

That second part is where families trip up, usually because everything's happening quickly and the payroll side feels like an afterthought. It isn't. Getting the final pay right is what keeps the whole thing ending on good terms, and it keeps you on the right side of Fair Work too.

Here's what actually needs to happen.

Work out the notice period first

Before anything else, check how much notice applies.

Most of the time it'll be written into your nanny's employment agreement, so start there. If the contract is silent on it, you fall back to the relevant modern award or the National Employment Standards, which set out minimum notice based on how long she's been with you.

Some nannies will give you more notice than they have to. Others will need to go sooner because life happens. Whatever the situation, pin down the final working date in writing. A quick email confirming the last day is enough, and it saves any "I thought you meant" conversations later on.

What goes into the final pay

Once you've agreed the last day, you can work out what's owed.

A final pay generally covers any wages for hours she's already worked, plus a payout of accrued but unused annual leave. Super still applies on her ordinary time earnings right up to that final day. On top of that, fold in any approved reimbursements that haven't been paid yet, along with anything else she's owed under her agreement.

Depending on how long she's been with your family, long service leave can come into it too. More on that below, because plenty of families don't realise it exists.

Fair Work's position is that final pay should land within seven days of the last day of employment, unless the award or agreement says otherwise. In practice, sorting it promptly is just good form.

Annual leave doesn't vanish

A common assumption is that leave balances reset to zero the moment someone leaves. They don't.

Permanent employees are entitled to be paid out for any annual leave they've accrued but not taken, and that gets included in the final pay. The catch is making sure the balance is actually right. Before you process anything, have a look back through timesheets, any leave already taken, and your payroll records so the number you're paying out is the real one.

If your nanny has taken leave in advance and ends up in the negative, don't just dock it from her final pay. Get advice first, because deductions like that have rules around them and you can land in hot water doing it the wrong way.

Super keeps running to the last day

Yes, super still applies.

If your nanny meets the eligibility threshold, your superannuation guarantee obligations continue right up until her final day. That covers the ordinary time earnings in her last pay, including any payout components that attract super.

With the ATO putting real pressure on super compliance, and Payday Super changing how often contributions need to be made, this is not the bit to let slide during a handover.

Super isn't applicable to any unusued leave that is paid out, but it does apply to the ordinary earnings.

Don't forget long service leave

This one catches families out.

Long service leave is a genuine entitlement in Australia, and it's set at the state and territory level rather than nationally. The rules differ depending on where you are, but broadly, once an employee has clocked up enough continuous service, they become entitled to a paid leave benefit, and any unused portion can be payable when they leave.

If your nanny has been with you for a long stretch, it's worth checking the rules for your state before you finalise her pay. It's easy to miss, and it's exactly the sort of thing that turns into a dispute months down the track.