How to Set Up Nanny Payroll in NZ | 6 Key Steps for Employers

Steps to Pay Your Nanny in New Zealand

Updated 18th May 2025

While it‘s an exciting move, hiring a nanny comes with obligations and responsibilities that are important to make sure you get correct.

Nannies can’t be paid cash under the table, and they also aren’t independent contractors. Therefore, nannies need to be treated like any other employee. For many households this brings a lot of challenges and uncertainty. 

To make it easy for you we’ve out lined 6 key steps to make sure that your nanny is paid correctly.

Sign an employment contract

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.

Register as an employer

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)

If you are using Pay The Nanny, you can skip this step as we make that aspect simple.

Set up your payroll system

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:

• Payhero
• I-payroll
• Smartly

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

Collect the necessary information 

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.

Make sure you pay your nanny taxes

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.

Manage leave and statutory obligations

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

Your nanny is entitled to the same minimum leave provisions as other employees in New Zealand, including:

• Annual Leave: Four weeks of paid leave after 12 months of continuous employment.
• Public Holidays: Paid days off if the holiday falls on a normal working day.
• Sick Leave: Ten days after six months
• Bereavement Leave and Family Violence Leave: Available in specific circumstances.

You also need to factor in KiwiSaver contributions, parental leave entitlements, and ACC levies. These statutory obligations can be complex to manage, especially when juggling your own work and family life.

About Pay The Nanny

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

Pay The Nanny provides simple, 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.

Whether you’ve hired a nanny for the first time or you’re looking to streamline your current setup, we’re here to take the admin off your plate. From employment contracts and tax filing to leave tracking and payslip generation, we handle the details - so you can focus on your family.

Get setup today or contact us and we'll help point you in the right direction.