Some get lucky but for most parents, the process of hiring a nanny who ticks all their boxes can feel like running a marathon.

What you don’t want to do is trip up moments before you cross the finishing line. This can happen if you don’t understand what your legal responsibilities are.

It all starts with treating your nanny as an employee. Read on to learn why your new recruit is exactly that and why you are now their proud employer.

Help! I Don’t Have Time for Any More Paperwork

There’s a lot more to employing a nanny than a quick bank transfer to pay for the hours they’ve worked.

Take stock for a moment. Ask yourself this, “Does the relationship I’m about to embark upon with my new nanny feel like that between an employer and an employee?”

It’s almost a dead cert that the answer will be a resounding, “Yes,” and that that’s exactly how it’s going to feel.

You may already be payroll savvy and have the tools to process your nanny’s payroll. If not, your blood might be running cold over the mere thought of the extra admin. Payroll duties? They can feel like embarking on an expedition up Mount Kilimanjaro.

Fear not because help is at hand. Pay the Nanny New Zealand has you covered. We’ll keep you on track so that you’re in full compliance with all your nanny payroll obligations.

Can’t I Just Pay My Nanny Cash?

No, you can’t, and, even if you did, you would still have to make tax declarations to New Zealand’s Inland Revenue Department (IRD).

Risk it and you do so at your peril. Your family’s welfare is at stake here. Remember it’s a small world out there. Nannies talk. They would have good cause to do exactly that if you’re not providing them with all the benefits they’re due as an employee.

The IRD encourages people to get in touch with them if they suspect an employer isn’t complying with the rules. You might be on the best of terms now and your nanny may have even requested you pay them in cash. Relationships can quickly change, however.

The penalties for non-compliance are stringent. At worst, a regular offender might face a jail term. Less severe consequences could be a hefty fine along with back-dated payments with interest.

The bottom line is this: paying your nanny under the table is not only illegal, it’s just not worth it.

My New Nanny Says They’re a Contractor

This should act like a big, flashing red light.

Is a nanny an employee or contractor? It’s highly unlikely, almost impossible in fact, that the IRD is ever going to see your new nanny as a contractor. So, just because your new nanny says they’re a contractor does not mean that they would be when working for you. Nor does it necessarily mean that you should treat them as one.

If you start off by getting the basis of your relationship with your nanny wrong, then you could end up paying the consequences for your error later. That could be very costly indeed. Not understanding is no defence.

Remember that being fully compliant means that you’ll mitigate any risk of a problem should your nanny suffer an injury at work. Incidentally, you should always have set up adequate insurance. All this will also help you to move on whilst staying on the right side of the law in the unlikely event that their work is not up to scratch. 

More often than not it will be you who, as the employer, sets the hours your nanny is going to work. You will be deciding on the amount and type of work that needs doing and you will be paying your nanny’s wages.

It is very rare for a nanny not to work continuously for a family or to come in for a short, one-off and finite project of work. If you're in any doubt at all, you must get in touch with an expert like Pay the Nanny so that you end up hiring and paying your nanny correctly.

Your Obligations as an Employer

First up, you need to be sure that your nanny has the right to work in New Zealand. You’ll also need a contract. It should be thorough and clear. Both you and your nanny should sign it. It needs to spell out:

• What duties you expect your nanny to carry out
• The number of hours you want your nanny to work
• How you will handle holidays, overtime and sick leave
• When your nanny’s period of employment is due to start and end
• What happens if either party decides to terminate the contract early

Each nanny role is unique. That means the number of hours, the duties and the schedule will depend on a family’s particular needs. Every engagement needs to be set up accordingly to ensure the employment arrangement is both fair and legal.

As an employer, you must be compliant with things like paying your nanny at least the minimum wage.

You need to make sure you give them the correct leave entitlements including any related to maternity. You should be across KiwiSaver, be able to generate payslips and deduct the correct amount of tax. It is part of your job to submit all this kind of information correctly to the IRD. 

Your Nanny Has a High Value

It’s worth taking a moment to remind yourself that the nanny you hire will be looking after your own precious children. Many nannies see their job as a vocation. Some have undergone long periods of study or have years of experience behind them.

That all has value. Nannies have a legal entitlement to treatment worthy of the vital part they can play in supporting you and your family. Part of that includes you paying them correctly, as you would anyone else.

There are further benefits of employing a nanny correctly and showing them that you value them. This is going to reap you all kinds of rewards you may never have considered. Your nanny is likely to:

• Experience better job satisfaction and work harder
• Be happier
• Stay on with you, meaning you don’t have to start looking for a replacement
• Work more flexibly and cover for you in emergencies
• Put more effort into caring for your precious children
• Make your life easier

If you fail to retain a great nanny, you are likely to experience a lot more hassle and higher costs further down the road. To begin with, you’ll need to factor in all the time it takes to find the right nanny who fits your circumstances.

You should also consider the effort it takes to get a nanny set up with the right pay structure. Once they’re “good to go,” paying your nanny should feel like a well-oiled machine.

Spend time with your nanny at the outset and to learn how you can help make their lives more fulfilled. All work and no play never helped anyone. Make sure you understand how you can support them with activities they may enjoy when not at work.

What Makes a Good Employer?

It might sound obvious but taking time to ensure that you pay your nanny correctly with all the right benefits is right up there. No nanny ever wants to feel it’s a requirement to constantly check their payslips for potential mistakes.

As a boss, you should make time to tell your nanny what a good job they’re doing. Always end the day with a “thank you.”

Excellent communication is also key. That means giving clear instructions. It also involves listening carefully to ideas, suggestions or concerns that your nanny might have.

Make time each week to sit down with your nanny for a “catch-up.” You don’t have to agree with all their opinions but give them validity by acknowledging them.

Be supportive of your nanny and show them the respect they deserve by staying abreast of any extra hours they may work. Keep a diary or schedule pinned to the wall that you both have access to.

Mark on it any dates that are particularly important to your nanny, especially any leave that they have requested. This demonstrates that you are considering their lives as well as those of your family. Always act fairly. Make sure your nanny knows how seriously you take their welfare. 

Talk to Pay the Nanny Right now

If you’ve found the right nanny who’s going to suit you and your family, the last thing you want is for them to slip from your grasp due to a technicality. Make putting in place the correct procedures for paying them a top priority.

The best way to get it all right and save yourself time and stress is to employ the services of a nanny payroll expert. We offer a bespoke nanny payroll service that is going to take care of all the admin for you.

Use Pay the Nanny and you’ll be well on the way to ensuring that your new nanny will feel valued. You’ll also be able to relax knowing that everything’s above board and shipshape.

Get in touch with Pay the Nanny now and let us take care of all your nanny payroll needs