PARENT RESOURCES

Taxation For Household Employees

PAYG withholding and household employees

If you employ household employees such as nannies, cleaners or gardeners, you may have to withhold an amount from any payments you make to them, even if you pay them in a private capacity.

In the case of overnight Nannies or babysitters through Night Nannies, these workers are classed as contract workers and you are not required to withhold tax.

Under pay as you go (PAYG) withholding, you may be required to withhold amounts from payments you make to your household employees, such as nannies or housekeepers. The amounts withheld are sent to the Tax Office

Superannuation

The Australian Taxation office states on its website the following;

You do not have to make Superannuation contributions for some employees. These include employees who are:

• Performing work of a private or domestic nature of not more than 30 hours per week, for example a part time Nanny or casual babysitter or
• Are covered by a bilateral superannuation agreement
• Under 18years of age and are working no more than 30 hours per week
• Paid less than $450 in a calendar month
• Are 70 years of age and over

In all other cases, you must make superannuation contributions on behalf of your employee.

Nanny Orientation

Families find that a little preparation and a few hours of orientation of the new nanny greatly improve the comfort level of both the nanny and family.

• Experts recommend that the parents (or at least one of you) spend a minimum of 4 hours with the nanny and the children in a typical day BEFORE leaving her on her own. This gives the nanny the opportunity to ask questions, become familiar with the routine, and communicate concerns to the parent(s). Parents can use this time to become comfortable with the nanny's judgement and observe her interaction with the child(ren).
• Check in a few times unexpectedly. This is not a sign of distrust, but rather another opportunity to observe the nanny's performance, unrehearsed. Take a few minutes to "catch her being good" and acknowledge it!
• Do a home safety check with the nanny - again before leaving her. Clearly spell out known hazards (your 7 year old's Legos are a risk to your toddler) and the storage of medicines and household chemicals. Consider placing poisons in a locked cabinet, a good idea anyway. Make nanny aware of any firearms in the home and follow recommended safety procedures to separately store and secure the firearm and ammunition.
• Introduce your nanny to the operation of the home alarm system, washer and dryer, pool filter, and any other mechanical items they need to be familiar with. Don't assume she knows how these things operate. Go over the way your home "operates" - the lock on the back door that sticks unless you remember to first lift the latch, the housecleaning company that has a key to your house and let themselves in each Monday morning, etc.
• Neighbourhood Introductions: Introduce the nanny to your next door neighbours, building manager and other individuals who the nanny may need to call upon in an emergency. This is also helpful in establishing his/her ties to your family/neighbourhood - the nanny will begin to feel part of your neighbourhood/community when people recognise her while she is with the children, etc. and she won't feel as much like a stranger. Don't be afraid to ask the neighbour for feedback - positive and negative.
• Addressing Emergency Procedures: Discuss, ahead of time, how you want illnesses and emergencies handled. Do you want to be contacted before the children's doctor in the case of a medical emergency? If the nanny feels your son's forehead and believing he is warm, takes his temperature, do you want to be contacted before any medication is dispensed? Are there standing orders which you want the nanny to follow as to who to contact first and if no answer, what or whom to contact next? Make sure the nanny has an emergency contacts list, and keep it up to date.
• Driving Tour of Community: If the nanny is unfamiliar with the surrounding area, spend a few hours during your orientation time together, driving the nanny around the area, pointing out your child's school and doctor's office, the hospital, playgrounds, library, grocery stores and drug stores, shopping areas and any other areas you will expect her to be driving with your child(ren). Let her drive, observe her driving skills. If the nanny will have access to a vehicle, you may want to give her the opportunity to take the car out alone, in order to become familiar with the vehicle before transporting your child somewhere. Leave a street directory, in the car for future reference.
• Introduce the nanny to public transit if applicable. Give her a public transport map/timetable and make sure she knows how fares are paid/collected.
• Review safety procedures before leaving the nanny. Remember not all nannies are experienced living in densely populated urban/suburban areas. Don't open the door to strangers, keep doors/windows locked at all times, tell callers the parents are 'unavailable', not 'they aren't home", no bike riding/roller blading without a helmet (and knee pads/elbow pads as appropriate), always use seat belts and car-seats are all typical admonitions. Nannies should keep the children in sight at all times when they are outside the home, and never send them into public restrooms alone (young boys CAN go in the ladies room with the nanny.) Make sure she knows where first aid supplies are, band aids and first aid cream especially.
• Buy a notebook and ask the nanny to keep a daily log. This would include what was eaten at meals, napping time, activities of the day, when medications were administered, and other items that occur during the day. Advise her of any time tracking and expense tracking procedures. Review the log at night and ask any questions.

Checklist of Items to Give the New Caregiver:

The following is a list of items which you may want to provide to your nanny. Many find it helpful to assemble these items into a binder that may be zipped up (trapper/keeper type) so the nanny may carry with her.

• set of keys to the house, the alarm (if applicable) and keys for any/all cars which they will be expected to drive. (If your car has a locking gas cap, don't forget that key too!)
• instructions for operating the alarm system and any other "keypad" system in or around the home
• medical treatment authorisation form - it is recommended that you confirm your children's doctor's and the local hospital's willingness to accept this form prior to the day when its use may be needed.
• copy of your child's insurance card and prescription card
• copy of any letters sent to child's school/camp authorising nanny to pickup the child.
• copy of car insurance card for vehicle(s) nanny will be driving
• list of important phone numbers. The following is a list of the most commonly needed numbers:
  • parents' work numbers
  • all cell phone numbers
  • Doctors number (and address)
  • hospital's number
  • close friend or neighbour's number
  • child's school number

Make Your Requirements Clear From The Beginning!

This cannot be stressed too much, but having stated the obvious, the following chart may help place this individual's new position in perspective.

Review the Work Agreement:

Sit down with your nanny and review the work agreement, sentence by sentence. This may seem redundant, (and it should be the second time, at least) but it is always easier to discuss job requirements when the relationship is just beginning, rather than having to address a problem which the nanny or you "didn't remember was in the contract." This is the time to discuss the scheduling of any class (First Aid, CPR, etc.) which you required in the Work Agreement as a condition of continued employment. If you want the nanny to arrange for and schedule the class(es), make this clear and set a date for them to let you know what plans they have made. Review your payroll procedures, including time tracking, pay day, and the deductions, if any, you will be making from the nanny's gross (before tax) pay.

Miscellaneous Information

The older your child is (and in some cases, the younger they are!) and the more children you have, the more information you will be trying to give the nanny during the orientation period. Each family will determine to what degree of detail, information will be presented to the nanny; however, most people agree that after a certain point, all the information starts to run together and it can become nearly impossible to remember which child likes the yellow blanket at nap time and which child only naps if the lullaby tape is put into the tape recorder. One approach to addressing this concern and increasing your level of confidence as you walk out the door that first day, is to consider putting most of this type of information in writing. Again, many families and nannies report success when this data is organized in a binder that may be transported with the nanny the first few weeks. Some keep copies of important authorizations in the glove box in the vehicle for access in an emergency.

The First Week:

Look over the job responsibilities and consider trimming out the nonessential duties for the first week. If dinner preparation is part of their responsibilities, consider bringing home pizza the first night. Give your new employee the opportunity to acclimate him or herself to your children and your home before inviting neighbourhood children over to play for the afternoon.