6 Tips on how to Pay your Nanny

Once you’ve hired a nanny, the first step is to make sure that you have an employment contract in place. 

There’s a number of questions and things to consider at this step:

• Is my nanny casual, part-time, fixed term or a full-time employee?
• What rate should I pay my nanny?
• What other benefits are included in my nanny’s employment package?
• Will my nanny be paid the standard amount of sick days each year or will this be a different amount?
• What is the notice period for my nanny?
• What are the agreed hours each day for my nanny?
  

Any employment contract must also include a job description which can provide a great way to set clear expectations for your nanny and her duties on a day to day basis.

As soon as both parties have signed their employment contract, you need to register as an employer with the IRD and before you can do this you need an IRD number. Here’s the link on how to get one, if you don’t have one.

If you do, then there are two ways you can register as an employer:

• Online through your MyIR
• By downloading and completing the Employer Registration Form (IR334)
  

While you can manage your payroll manually, we suggest that you use a payroll software. This will help reduce manual errors and make it much easier when it comes to filing and paying your taxes on a monthly basis.

There are a number of great cloud-based software to choose from:

• Flexitime
• I-payroll
• Smart Payroll

Most of the payroll providers are fairly similar but we find that flexitime has the best pricing structure and has the best usability.

There are a number of documents that you need to collect from each employee that starts with you.

Before your nanny begins, make sure you have the following information:

• Proof of their right to work in NZ
• Completed tax code declaration (IR330)
• Completed Kiwisaver forms (KS2 or KS10)
• Bank account details
• Any other relevant information

If you’re not sure on which documents should be completed, get in touch with us via email or contact your accountant.

Not paying your nanny taxes can get you on the wrong side of the IRD very quickly, so it pays to stay as up to date on these as possible.

You will be responsible for paying taxes for your nanny and these include:



• Income tax (PAYE)
• KiwiSaver contributions, if they're a member of KiwiSaver
• Child support payments, if they owe child support, and
• Student loan payments, if they have a student loan
  

These are filed and paid on the 20th of each month for the prior month. We recommend that you use a PAYE intermediary, or a payroll provider like us, to ensure that you don’t miss deadlines or make the wrong payments.

One last important thing is to make sure that you’re calculating the correct leave entitlements. 

Nannies are entitled to the same employee entitlements as any other employee meaning they need to be paid holiday pay, public holidays, sick leave, bereavement leave and parental leave.

The holiday pays act can get complicated so we recommend using a payroll software, or an external provider to help manage your leave requirements.

Our mission is to make it as simple as possible for households to manage payroll for their nannies.​

Pay The Nanny provides friendly, accurate and flexible nanny payroll services to nanny employers. We take care of everything to do with PAYE, ACC, holiday pay, sick pay, maternity leave and Kiwisaver.

For more information, check out our website at www.paythenanny.co.nz. Make sure you give us a like over on our Facebook page too.