Whether a nanny is a contractor or employee can be complicated, and ultimately only a court can determine if someone is a contractor or employee. Both the ATO ( Australian Taxation Office) and the FWO ( Fair Work Ombudsman) FWO website has some general information on the differences between independent contractors and employees , including factors that should be weighed up to consider whether someone is an employee or independent contractor.
No single factor will determine if they’re an employee or independent contractor – all of the factors need to be considered as a whole.
The best rule of thumb is, what’s the family’s level of control over the nanny/au pair’s day-to-day activities, if it is high then it’s likely they should be an employee. If you use this as your guide, its safe to assume that in most cases your nanny should be processed as an employee.
A nanny may be an independent contractor if they are legitimately running their own business. In these cases, it’s more likely that the nanny would advertise their services, work for multiple families, have a high degree of control over their own day-to-day activities and control the hours they work.
This is a general guidance only. Whether a person is an employee or an independent contractor will depend on their individual circumstances.