How to Pay Your Nanny Legally in Australia

(A Step-by-Step Guide)

If you’ve been looking into hiring a nanny, you’ve probably asked yourself:

How do I actually pay them properly?

For most families, it starts out feeling simple. You agree on hours, a rate, and it feels like a private arrangement.

But this is usually the point where things start to shift.

In Australia, most nannies are considered employees, which means the responsibility for how they’re paid doesn’t sit with them, it sits with you.

Why paying your nanny legally matters in Australia

This is the part that catches most families off guard.

Because your nanny is working in your home, following your schedule and direction, the arrangement is usually considered employment under Australian law.

That’s what brings tax and payroll into the picture.

Instead of your nanny managing their own tax, the responsibility shifts to you. That can include withholding PAYG tax from their wages, reporting payments to the ATO, paying superannuation where required, and providing payslips.

At that point, it stops being “just paying someone” and starts to look a lot more like running pay

What actually needs to happen when you pay a nanny

Once that shift happens, there are a few things that need to be set up properly.

You’ll generally need to register for PAYG withholding with the ATO so tax can be handled correctly. From there, payments are reported through Single Touch Payroll (STP), which is how the ATO tracks wages, tax and super.

Each time your nanny is paid, you’re also required to provide a payslip that clearly shows what’s been paid and what’s been withheld.

Depending on your nanny’s situation, you may also need to pay superannuation on top of their wages.

👉 You can read more about super requirements here: Do I Have to Pay Super for My Nanny in Australia?

The part most families don’t realise

A lot of families don’t realise any of this applies until later.

It’s common to start with a cash or informal arrangement, assuming it’s simpler that way. But if your nanny is an employee, those tax and reporting obligations still exist, whether they’re set up or not.

This is usually where issues start to surface, especially if things need to be corrected down the track.

👉 We’ve covered this in more detail here: The Legal Risks of Paying Your Nanny Cash in Hand

So what’s the easiest way to pay your nanny properly?

This is usually the point where families decide they don’t want to manage it themselves.

Setting up PAYG, handling reporting, tracking super and staying compliant can feel like a lot, especially if you’ve never employed someone before.

That’s why many families choose to use a payroll service designed specifically for nanny employment.

At NannyPay, we manage the full process, from setting things up correctly to handling the ongoing payroll, so everything is taken care of behind the scenes.

In most cases, paying your nanny legally in Australia comes down to one key thing: You’re employing someone in your home.

And once that’s understood, everything else starts to make more sense.

If you’re unsure how it applies to your situation, you’re not alone. Most families are figuring this out for the first time, book in a FREE call with NannyPay and we will help you figure it out over a no-obligation consult.

parents, book a free call

We are your certified nanny payroll experts

The NannyPay Way

We care about families.
You deserve to soak up all the benefits that come from employing a nanny. The NannyPay team is here to take the pressure off everything that comes with it.

We care about Nannies
Your nanny deserves fair and legal pay as a life-changing member of your family. Let us help you pay them the right way, and watch your relationship (and their financial future) flourish.

We care about correct pay
The best path to long-term success is to do things by the book. That’s why NannyPay does all the heavy lifting for you, so you have peace of mind at every step of the way.

We care about women.
Childcare often impacts women the most. NannyPay is designed for women, by women. We are Melbourne based, servicing Australia-wide. We empower parents to return to work outside the home with confidence and empower a female-dominated workforce to be financially secure in a caregiving industry.