Nanny entitlements

It is important to be informed and know your entitlements in relation to tax, superannuation, insurance and so forth.

These should all be set out clearly in your employment contract.

It is vital to have an employment contract or agreement to ensure you are covering yourself and clearly know your rights and responsibilities for the position as well as your entitlements.

Being a nanny as a profession means you have no less a right to entitlements than any other professional.

Historically, a nanny may have easily fallen below the radar and been quite likely to have been employed without the appropriate legal employee entitlements or “on the black market”.

Much progress has been made over the years and now you traditionally will find a nanny is employed as an employee.

As such a nanny’s employment generally falls under the Miscellaneous Award 2010. A nanny falls under this award as you are employed and have entered into an employment agreement in a private home to care for children and perform related tasks.

This is different to the Children’s Services Award 2010 which covers employment in the areas of  those performing child care work in day care facilities, family based childcare, out-of-school hours care, vacation care, in-home care (a government funded program), kindergartens and preschools, mobile centres and early childhood intervention programs.

A nanny may also be an independent contractor. This is where it is the nanny themselves responsibility to ensure all the requirements are being met.

To learn more about the wage https://www.fairwork.gov.au/pay/minimum-wages/pay-guides

Be mindful that the obligation to pay the minimum wage as per the award applies in spite of any benefits (use of car, phone, etc) that may be offered as part of the employment. This is unless it has been alternatively agreed as part of a salary sacrifice or a specific employment agreement.

It is important to also be clear on your entitlements.

A full time employee is entitled to a minimum of 20 days annual leave or pro-rata for the hours/days worked. And part time employees receive the same entitlement on a pro-rata basis.

Sick leave is 8 days in the first year for a full time employee or on a pro-rata basis.

Your employer is required by law to register with the ATO (Australian Tax Office). This will also allow for income tax deductions.

In the UK nannies do not have to be registered, however, you can choose to be via the following authorities:

• England: Office for Standards in Education (Ofsted)
• Scotland: Social Care and Social Work Improvement Scotland
• Wales: Care and Social Services Inspectorate Wales
• Northern Ireland: Health and Social Services Trust

Your employer will need to negotiate a workplace agreement/nanny contract that will include such details as how often your paid (fortnightly, weekly) and how it is to be paid.

Under pay as you go (PAYE withholding), as the employer they may be required to withhold tax calculated on the amount you earn. These amounts are sent to the Tax Office.

For further information to clarify https://www.ato.gov.au/Individuals/

Being paid cash in hand (or under the table) is not only illegal it is unfair to you, for example, if you want to apply for credit to purchase a car or house you have no means of substantiating your income. It is also unnecessary given the progression of recognition of nannying as a profession.

Superannuation should be paid for any employee over 18 years working either as full-time, part-time or casual.

If you work over 30 hours per week or are paid $450 or more in a calendar month, then you should be having superannuation guarantee contributions made to your choice of complying fund.

This is 9.5% (in Australia) of your gross wage. Superannuation is paid to the fund of your choice quarterly. If as a Nanny you work less than 30 hours per week then the employer is not legally required to pay superannuation.

If you are employed as a contractor then the tax and superannuation is your responsibility and as such should be negotiated to cover this in the rate of pay.

If you require further information please contact the ATO on www.ato.gov.au/Individuals/Super or 13 10 20

Do you need insurance?

Actually your employer is required by law to provide Workers Compensation for an employee who is employed in their home.

As an employer they should have liability insurance. It’s a good idea to check before starting employment as to what cover they have if you have any concerns.

Work Cover is the best place to look for understanding regulations and obligations and the best cover required. Each state has differing regulations regarding Work Cover.

For example: WorkCover Queensland offers insurance called “A Workplace Personal Injury” Insurance policy. The policy is available only to individuals who are deemed to be an “eligible person.” Their insurance is an optional one. It covers you in financial terms to those not covered for workers compensation and a nanny generally falls into that category. The premiums vary as it is based upon total income.

Insurance can vary but can be as little as $20-60/ year. Just make sure you research with Work Cover in your state so that they are suitably covered should an accident occur.

Car insurance:

If you are going to be using your employers car then you need to be added to their comprehensive cover.

If you are expected to be using your own car it is important you have comprehensive cover especially if you should be transporting the children in your car.

Other insurance:

You may wish to look at obtaining specific nanny insurance which is a form of Public Liability Insurance. This is not essential and is not required by law but after you have done research you may find it is something you wish to do (or not).

Not many companies offer specific nanny insurance. You will need to research for one that best suits your needs, budget and circumstances.

Other allowances:

If you use your car as a condition of your employment then you should negotiate a rate for petrol as you are able to claim an car allowance. This is generally a set amount per kilometre by the ATO currently at $0.72/km. This to cover petrol for the running around for work related tasks/reasons completed during work hours.

If this is to be utilized you must keep a log book to claim the allowance. This can be something that they can claim through you or tax and needs to be established at commencement so that it is clear.