At CareforKids.com.au we receive many questions from families about the best way to employ a nanny.
The guide below offers information on your key responsibilities and includes a sample employment contract and a Nanny/Parent Diary which you may find helpful for keeping the lines of communication open.
Hiring a nanny
We recommend taking a business approach, at the core of which is establishing a contract of employment. Such an agreement should limit misunderstandings regarding employment conditions and make sure all parties are on the same page.
Nannies fall under the Miscellaneous Award. They are in an employment relationship, working in a private home, and perform tasks in caring for children which include preparing meals, planning educational and play-based activities, and doing light housework.
You can view the pay rates specified by the Miscellaneous Award here.
According to the Fair Work Commission, your obligations and responsibilities as the employer of a nanny depends on your specific relationship. Nannies are usually hired as employees, however, under some circumstances, they can be classified as independent contractors.
If you’re unsure of the difference or which arrangement will work best for you, then it might be a good idea to think about your situation and refer to the Fair Work Ombudsman’s Independent contractors page which talks about the difference between independent contractors and employees.
Employment contract
Areas covered in the employment contract between you and your nanny can include salary, benefits, hours of work, main duties and responsibilities, sickness and holiday entitlements, notice period and performance reviews.
Salary
- Set down the agreed salary including $___ pay per week/month/hour
- What is the pay period and when will your nanny be paid?
- What is the method of payment? For example, cheque, cash or into a nominated bank account?
- What is the overtime rate that will apply?
- As mentioned above, nannies are entitled to the Miscellaneous Award rates of pay, which as of 1 July 2021 start at $20.33 per hour for full-time and part-time workers or $29.48 an hour for casual workers.
Hours of Work
- Set out the expected hours of work. For example, Monday to Thursday, 7:30am to 6:00pm.
- Agree on public holiday entitlements. If the nanny is expected to work on public holidays, agree on the rate of pay or whether it is time off in lieu. Under the Award, the minimum rate for public holidays is $50.83 per hour for full-time, part-time and casual workers, but you and your nanny can agree to a flexibility clause and negotiate your own arrangement.
Reference and Background Checks
We strongly recommend you conduct a background check on any prospective nanny to ensure he/she is suitable to provide care for your child.
For further information please see our article Working with children checks which outlines the various legal requirements and resources available to you in each state and territory.
The decision and responsibility of hiring any carer rests with you. Be sure you have the facts regarding previous employment, criminal records, driving records, immigration and visa status so that you can make the most informed decision possible.
Duties / Parenting Philosophy
Ensure you are specific about the nanny's responsibilities. Provide clear information about your family’s routines, including nap and feeding times, weekly activities and so on.
Include plenty of information about your parenting philosophy, including information on disciplinary measures, TV time, sleeping methods, nutrition, hygiene and safety.
Spelling it out beforehand will minimise the potential for misunderstandings and disagreements down the track. Ensure you are available to discuss any changes with your nanny as they come up.
Leave Entitlements
- Determine the annual leave entitlement. All full-time and part-time employees are entitled to four weeks of paid annual leave, based on their ordinary hours of work (e.g. if they usually work 20 hours a week, they’re entitled to 80 hours of holiday pay)
- Determine the sick and carer’s leave entitlement. All employees except casuals are entitled to paid sick and carer’s leave. The yearly entitlement, based on ordinary hours of work, is 10 days for full-time employees and pro-rata for part-time employee.
- Set down notification times for when the nanny is to contact you by if they are sick and conversely set down a procedure in the event of you being delayed.
Income tax
Depending on the nature of your employment contract, you may need to register with the Australian Taxation Office and withhold tax from payments you make to your employee nanny. For further information visit ATO.gov.au. The ATO says you do not need to withhold money if you pay a nanny agency, which pays your nanny as a third party. Nannies hired as independent contractors will be responsible for maintaining their own tax affairs.
Superannuation
If the nanny works for you for over 30 hours per week and you pay them $450 or more (before tax) in wages per month they are entitled to superannuation. The current rate of superannuation is 10 per cent of the employee's gross wage. For more information, visit the ATO or contact the ATO's Superannuation Hotline 13 10 20 (weekdays, 8am to 6pm).
Payroll services
If you are unclear how payroll works, consider using an external service to help you pay your nanny's salary. There are many available in the market. Here are a few you may wish to consider, Domestic Payroll, CarePayCo or Just Family Payroll.
Domestic Work Cover insurance
Insurance to cover your nanny in the event of an accident is a further consideration. Legislation on insurance requirements varies between the different states and territories.
For information on the insurance requirements in your area click on the links below:
New South Wales
Queensland
South Australia
Tasmania
Victoria
Western Australia
Australian Capital Territory
Northern Territory
Automobile and other insurance
If the nanny has use of your car, make arrangements to include them under your policy. Check to ensure that compulsory third party insurance also covers third party property damage. If your nanny is under 25 years of age, you should check what additional provisions need to be made to cover them under your policy.
You may also wish to request that your nanny has additional insurance. Policies available for nannies can be obtained from Nannysure.
Additional expenses
Any additional out of pocket expenses should be agreed upon. It's a good idea to set aside an additional cash amount each week to cover outings, snacks, excursions, swimming classes etc.
If the nanny will be using their own car for work-related tasks then an allowance to cover fuel costs and additional wear and tear on the car should also be set down.
A log book should be established to record kilometres travelled in the course of their duty.
Ask your nanny to check their insurance policy to ensure appropriate cover for transportation of your children.
Notice period
Agree on a notice period including any arrangement for payment in lieu of notice. The standard notice period is generally two to four weeks.
Probation salary and performance reviews
Conduct regular salary and performance reviews. Set down the times for a performance review. For example, after the three month probation period, have another review at six months, followed by a 12 month salary and performance review.
Consider a mediation procedure for any issues or grievances that need to be raised throughout the period of employment.
Contract review and/or amendments
In the event of the birth of another child, both parties should discuss the continued employment arrangements, including a review of the current employment contract.
Communication
Many nannies cite poor communication as the reason for leaving a family, so take time at the beginning and the end of each day to debrief with the nanny. If this isn't possible, introduce a diary system, which allows the nanny to record the events of the day including appointments, meals, social outings, sleep times and medications as well as the child's developmental steps.
Consider a weekly review which involves an informal discussion allowing both parties to give and receive feedback.
Provide positive feedback and praise for a job well done. Conversely, if you are unhappy in any way with the nanny's performance, discuss this immediately.
Click here for an example of a Nanny / Parent Diary system you could introduce.
Confidentiality
It is also important to consider a confidentiality agreement to ensure that the affairs of the household are kept private.
Here is an example:
The employee shall keep the affairs and concerns of the household and its transactions and business confidential. It is a condition of employment that except as required by Law, the employee shall not disclose confidential information to any persons whatsoever without the consent in writing of the employer. This provision shall apply for all time and survives expiration or earlier termination of this Agreement. The operation of this clause shall not apply to information disclosed to medical or other health professionals in the course of obtaining treatment for the child(ren).
Other benefits
Look at longer-term benefits to make the job as attractive and enjoyable as possible.
Benefits you may wish to consider include:
- Good living quarters (if applicable)
- Use of a car
- Occasional late starts and early finishes
- Cash bonuses
- Health cover
- The occasional token of gratitude such as a night out, movie tickets, pamper pack
All of the research about early care and education leads to one overriding conclusion - quality matters.
To get started and put your Nanny Employment Contract together click here for an example contract you can use as a guide.
If your nanny is a trusted and valued employee whom you wish to retain, then these incentives can go a long way in improving staff retention.
Help to keep lines of communication open with your Nanny - print out this useful Nanny/Parent Diary.
