Hiring a nanny brings invaluable support for families, but it also comes with the responsibility of managing payroll. Many parents in Australia are unsure where to begin when it comes to nanny payroll, especially with legal obligations like tax, superannuation, and overtime. Fortunately, the process doesn’t have to be complicated. This guide will walk you through five easy steps to simplify nanny payroll and ensure you remain compliant with Australian laws.
Before you start setting up payroll, it’s important to understand whether your nanny is classified as an employee or an independent contractor. In Australia, most nannies working regular hours in your home will be considered employees. As an employer, you are responsible for managing their wages, superannuation, taxes, and entitlements like annual leave.
To classify your nanny correctly:
Once you've established that your nanny is an employee, you can move forward with setting up a proper payroll system.
If you are using Pay The Nanny, you can ignore this step. We make the process of working with the ATO super simple by filing all your nanny’s records directly with the ATO. This means you don’t need to worry about managing anything with the ATO.
As a nanny employer, you'll need to register with the Australian Taxation Office (ATO) to meet your tax and superannuation obligations. You’ll be responsible for withholding income tax (PAYG) from your nanny's wages and paying it directly to the ATO.
Here’s how to register:
Once registered, you’ll be ready to withhold and report PAYG tax, ensuring your nanny’s taxes are correctly handled. If you are using Pay The Nanny
Superannuation is an essential part of nanny payroll in Australia. If your nanny works more than 30 hours per week you are legally obligated to pay super contributions on their behalf. Superannuation contributions must be paid at the current rate of 11.5% of your nanny's ordinary time earnings (OTE), and these payments must be made at least quarterly.
To simplify the process:
By keeping up with your superannuation contributions, you’ll stay compliant with the law and ensure that your nanny receives the benefits they’re entitled to. Again, if you’re using Pay The Nanny, we’ll manage and pay your super on time, every time, for your nanny.
Your nanny is entitled to the same rights as other employees in Australia, including leave entitlements and overtime pay. It’s important to keep accurate records of your nanny’s hours worked, as well as any overtime, sick leave, and annual leave accrued. Most nannies are paid under the Miscellaneous Award in Australia.
Having a clear record-keeping system in place for your nanny’s hours, overtime, and leave will ensure that payments are correct, and entitlements are fulfilled.
If everything is feeling overwhelming, or stressful, fear not – we've got your covered.
Setting up and managing payroll for your nanny can be time-consuming, but it doesn’t have to be. By using a dedicated nanny payroll service, you can automate much of the process, ensuring your nanny is paid correctly and that all tax and superannuation obligations are met.
With a service like Pay The Nanny, you can enjoy the following benefits:
By automating the process, you’ll reduce the risk of payroll errors and free up more time to focus on your family.
Managing nanny payroll in Australia may seem daunting at first, but by following these five easy steps, you can ensure that your nanny is paid correctly, your legal obligations are met, and you can enjoy peace of mind. From registering with the ATO to automating payments with a payroll service, taking the time to set up an efficient system will save you stress in the long run.
If you want to make the process even easier, consider using Pay The Nanny to take care of your nanny’s payroll. With our automated service, you can ensure that taxes, superannuation, and entitlements are handled correctly, leaving you with more time to spend with your family.