Superannuation is complex – and the rules change regularly. When you engage a Nanny Payroll service you can have peace of mind that professionals are taking care of the details for you and your domestic staff.
Under the current rules, superannuation should be paid for any employee over the age of 18 years. If an employee is paid more than $450 in a calendar month, then the employee should be having regular superannuation guarantee contributions made to their choice of super fund.
Nannies are entitled to superannuation
As with all other professions, Nannies are entitled to a 10.5% employer contribution as part of their wage. Superannuation should be paid to their fund of choice quarterly – in April, July, October, and January.
However, if a Nanny works less than 30 hours per week, then employers are not legally required to pay superannuation. You can still offer to pay superannuation in these circumstances – in fact, it can be an incentive for employment in many cases.
Your super obligations as an ‘employer’
It’s important that super is lodged in full and on time. The ATO does charge late fees and penalties if superannuation obligations are not met, for example, they are not paid by the due date, or if the contribution falls short of the amount it is supposed to be – this is called a super guarantee shortfall or if the super is not paid into your Nanny’s choice of a fund – this is called choice liability.
Of course, if a Nanny is employed as a contractor then tax and super become their responsibility. As does sick leave and holiday pay.
Employee versus independent contractor
While negotiating independent contracting rates is tempting, because it’s more straightforward, it doesn’t always provide the employer with certainty. An employment contract on the other hand will detail sick leave entitlements, holiday leave entitlements and resignation periods, so that when the time comes for the Nanny to leave, families have a notice period which helps them to help the children adapt to changing circumstances, find someone new if needed, and allow for a period of handover.
An independent contractor does not have to provide these obligations.
Professional help is recommended
Rather than worry about all of these complexities, it makes sense to use a professional nanny payroll service, so you can have peace of mind that all of your obligations are being taken care of.
At CarePayCo, we can help you – not just with superannuation, but a range of other considerations around tax, employment contracts, employment renegotiation, for example, if you have another baby, insurance, reimbursement of expenses…. And the list goes on.
We are specialists in Domestic Services payroll, so we can assist not just with paying your nanny, but other home services too, such as cleaners, gardeners, and pool maintenance.
