Superannuation for your nanny & au pairs

Superannuation, retirement and pensions are big news at the moment, with a number of changes to legislation to super about to take place.

The main change to super is the increase in compulsory superannuation. The rate of superannuation for your nanny and au pair is currently 9.5% on gross wages. The next super increase is 10% to take place July 1, 2021.

Super is due each quarter over the following periods into your nannies nominated fund:

  • January to March due April 28th
  • April to June due July 28th
  • July to September due October 28th
  • October to December due January 28th

Nannies & Au Pairs in the home are exempt from superannuation if they work less than 30 hours or less a week, the moment they work more than 30 hours or more compulsory superannuation obligations kick in.

Please note if you are paying your nanny as a contractor instead of an employee, you are still obligated to pay superannuation once your nanny works over the 30 hour mark. If you are unsure use the ATO Super Eligibility Tool

If you are a concerned about the increasing cost you may want to consider offering any new contracts inclusive of super. It is not advisable to make the change to an existing contract.

Its also important to note that, if your nanny works less than 30 hours a week, you can still pay superannuation if you choose too as an incentive for your nanny to stay working with your family.

What happens when you don’t pay your super obligations

It’s very important that all super is lodged in full and on time. If you haven’t met your super obligations as an employer, you should lodge a Superannuation guarantee charge statement – quarterly with the ATO which includes an administrative super charge.

You’ll have to pay the super guarantee charge if you:

  • don’t pay enough super contributions for your nanny– this is called a super guarantee shortfall
  • don’t pay super contributions by the quarterly cut-off date for payment.
  • don’t pay super to your nannies chosen super fund – this is called a choice liability.

It’s best to lodge the late payment advice to the ATO voluntarily when it initially happens as if you are audited by the ATO th fines and penalties can be steep for not meeting your superannuation obligations.

For further information on Australian superannuation  for your nanny, contact Domestic Payroll.