Working using an ABN

CAN I WORK AS A NANNY USING AN ABN?

 As a nanny working in Australia, you would be paid as:

  • a ABN contractor, administering your own tax, super and insurance using an ABN number or
  • an employee, with the family managing the tax, any super and insurance.

For nannies hired as an ABN contractor, you need to check that it’s the correct way to go ahead for you.  It is unfortunately not that simple for both you and your employer just to decide that’s what suits you both, as the employee/contractor relationship is governed by a number of rules and departments. You and the families that hire you, need to check your status as does anyone working as a contractor providing a 100% service. As compared to say a plumber working using their ABN, who works for multiple clients and charges for both service and material their contractor status is clear.

The main rule is – what is the level of control you have over your work, for example can you choose your own work hours, choose not to work, send someone in to work for you? In most cases the answers to these questions for nannies would be no and that’s why you really need to drill down into your working situation.

And that’s not to say you can’t work as a contractor if you are legitimately running your own business.  In this situation, you would just show how you advertise your services, work for multiple families, have a high degree of control over your day-to-day activities and control the hours you work.

There are three main bodies that look after the employment/contractor relationship in Australia:

The Australian Taxation Office ( ATO) – determines how much tax you should pay on income. The ATO has a great online tool that will give you an answer at the end on whether they believe you are an employee or a contractor – ATO Employee/Contractor Decision tool

  1. The Fair Work Ombudsman (FWO) – lays out the rules determining your working conditions for all of Australia except WA. It also has an online test that you can use as a guide for your employment status.
  2. Your local Workplace Health and Safety Authority –lays out conditions for a safe working environment (OHS) – this is not a federal body and rules vary from state to state.

There is no single rule which will determine if you’re an employee or ABN contractor – all factors need to be considered, which is why the tests are good place to start.

If you do end up working as an ABN contractor for one or two families – you should also review the following:

  • Check if the family has workers compensation insurance in place – as a contractor providing 100% service most states would see you as a ‘deemed employee’ and in this situation insurance taken out by the family is compulsory. This insurance covers you, if you have an accident at work. You or your employer will need to contact the department in your state that manages workplace safety.
  • As a contractor providing 100% service, the ATO also see you as deemed employee and as such you are entitled to super if you work over 30 hours per week.