Nannies and Helpers recommend that you seek advice from your accountant before employing your domestic staff.
As an employer you have the following obligations.
- The Employer should apply to the Australian Tax Department for an ABN Number (there is no cost for this).
- The Employer must remit employee tax to the ATO.
After the first instalment the ATO will automatically send you a monthly or quarterly remittance form.
- All employees must receive a pay slip for wages paid weekly, fortnightly or monthly.
- Your employee needs to complete a Tax File Declaration.
A copy must be forwarded to the ATO and copy kept on file.
- Your employees must receive a PAYG Payment Summary for the financial year by 15 July.
- If your domestic employee works more than 30 hours per week they are entitled to Superannuation and are entitled to choose their own fund.
- The Employer should remit superannuation, at least quarterly, by 15th day of the following month.
From 30 June 2008, there are major changes regarding Domestic Workers Compensation Insurance. Insurance companies will no longer be able to offer Workers Compensation policies via their Home and Contents policies in New South Wales.
Nannies and Helpers strongly recommend that you take out separate insurance to cover your domestic staff. If you neglect to take out Domestic Workers Compensation you will be leaving yourself exposed to Medical Expenses etc and penalties and fines imposed by Workcover.
How to pay your domestic employee
Domestic staff are not covered by any Award, however, Fair Work Australia provides all employees with a safety net of minimum terms and conditions of employment under the National Employment Standards (NES).
Employee or Subcontractor/Independent Contractor
Domestic employees are usually integral members of the family and as such are entitled to be paid their legal entitlements to annual leave, personal leave and superannuation. Domestic staff are employees and not sub-contractors for reasons detailed below:
- paid gross salary less tax and applicable entitlement to superannuation
- work under your control and direction
- paid for the time they work
- receive paid leave (sick, annual, long service, and so on)
- use materials or equipment provided to do their job
- perform the duties of the position
- have agreed to provide their personal services
- work hours which are set by agreement
Subcontractors are conducting a business and:
- Submit an invoice with ABN number for payment
- Are paid for results achieved
- provide all or most of the necessary materials and equipment to complete the job
- Are free to delegate work to others (including other subcontractors)
- have freedom in the way the work is done
- provide services to the general public and other businesses
- free to accept or refuse work
- are in a position to make a profit or suffer a loss