There are numerous benefits of choosing a Nanny over regular daycare options. And if you’ve just made the decision to employ a Nanny, then congratulations! Give yourself a high-five! You are about to realise this is one of the best decisions you ever made… Because, let’s face it, having happy, settled children is absolutely worth its weight in gold.
So, how can you keep your new found Nanny happy for the long-term?
Quite simply, you need to legitimise your relationship. Here’s how.
Make the arrangement formal
The first step in the process is acknowledging that you are now an employer. Sure, you might have other ‘home help’ like gardening services, a cleaner and help with the ironing, but your Nanny is much, much more than occasional hired help.
A nanny takes care of your most precious assets, and undoubtedly works more hours for you than the gardener or the cleaner. So, you need to make sure that pay reflects worth. Market rates are easily obtainable and vary depending on experience.
Secondly, once you’re both happy to commit to a work arrangement, you need to make it formal. It’s wise to do some research on the Fair Work legislation and also the Australian Tax Office rules. This way, you can draw up an employment contract with the Nanny so you both know what’s expected and, more importantly, what your obligations are to one another.
Don’t pay ‘under the table’
Thirdly – don’t pay cash ‘under the table’. If you want to pay cash, that’s fine, some Nannies prefer it… BUT, make sure that what you’re paying is accompanied by a payslip which details important information such as withholding tax, out-of-pocket expenses and reimbursements, leave accruement and superannuation contributions (if necessary).
A pay slip is vital. Why? Because it is a record of income and it not only means that your Nanny can complete an accurate annual tax return, it provides a record of earnings which is required by a bank or any other lender. Without it, it’s impossible to get a loan, or car finance, or even a credit card.
It is possible that your Nanny’s pay might also be a tax deduction for you, and then you’ll also need the records for your tax.
Some Nannies also prefer to work on a ‘contract’ basis, and are self-employed. This requires a different payment arrangement all together.
Keep it simple
Does it sound complicated? Well, it can be. The fact is Australia has one of the most detailed and convoluted tax systems in the world. And you could find yourself in trouble with the law, or with a hefty fine to pay, if you don’t get it right. But there is a solution.
CarePayCo offers an end-to-end domestic payroll solution that will manage all processing and reporting requirements for your Nanny.
Discover the benefits of CarePayCo
Set up can be done in a matter of minutes. Once the details are in the CarePayCo system, the fortnightly pay schedule runs from an app. The nanny logs the hours worked, these are signed off by the designated family member / employer and the payment is made, with all other calculations complete.
Whether your nanny works full time or only a few hours per week, the system is invaluable. You can also set up payments through CarePayCo for other household staff too.
One of the greatest advantages is that as ‘payroll specialists’ the CarePayCo team has a wealth of knowledge around the ins and outs of how to pay wages – this includes your tax and super obligations, calculating leave based on time worked, accounting for sick pay, paying car mileage if necessary, and anything else that you might require along the way.
Every family has different needs and so it stands to reason that every family will have unique arrangements with their Nanny based on these needs. You, as the employer, dictate the terms and conditions of your employment arrangement in negotiation with the Nanny, then the CarePay Co will work within these specifications, but … also ensure that you’re 100% compliant under employment and tax law at every step of the process.
Transparency and fairness will serve you both well
Doing the right thing by your Nanny means that you set your relationship up with financial transparency, and there’s nothing more important, because so many Nanny / Family relationships can disintegrate when there are disagreements, misunderstandings or discrepancies over pay.
When this happens you risk damaging your relationship with the Nanny, or they quit. And the people who suffer most when that happens, are the little people.
The fact of the matter is that you chose a Nanny over other forms of child care because you wanted reliability, someone who would bond with your children, take the time to get to know them, and encourage them to learn and grow, provide them with lots of love and attention and care when you are not around. This involves honesty, trust. And so it’s your responsibility to demonstrate the value you put on this, and the respect you have for the arrangement.
The best way to do that is to provide good working conditions, and that starts with remunerating fairly and regularly, making sure all legal obligations for tax, super and insurance are met.
