HIRING FOR HOUSEHOLD SERVICES
The year 2022 brings the start of a new era as we all return back to our workplaces and get back into our busy lives. We are also trying to master achieving all those things that we used to do, or the extra workload that we have gathered on the way! For some this may require looking at new options, and perhaps obtaining assistance with the tasks that we do around the home. Hiring staff to assist with household services could give you that extra time that you need to focus on what you want to do. This may include hiring a nanny, a housekeeper, gardener or similar individuals to provide assistance on a regular basis. It is important to know your obligations when hiring for these household services.
When you undertake to hire for household services, you may choose to employ an Australian Resident or a Working Holiday Maker on a visa. Working Holiday makers are temporary visitors to Australia who hold a Working Holiday Visa (usually subclass 417 and 462). The usual relationship is defined as an employee and employer relationship, giving rights to the employee and responsibilities to the employer. As an employer you have the same obligations as any business hiring staff. This means that the areas of payroll, including superannuation and Workcover and also workplace safety should all be considered for the place of employment. The administration is also the same as that for a business.
The employee will need to complete a Tax File number withholding form, superannuation choice, be notified of the National Employment Standards and be provided with a payment summary at the end of the financial year. The employer has the responsibility to provide a safe working environment, maintain accurate records for the preparation of reporting to the ATO, and provide an end of year payment summary to the employee as well as completing Activity Statements on a regular basis, usually quarterly.
The process begins with completing the Tax File Number Declaration form, and the employee will disclose if they are an Australian resident or a foreign resident for tax purposes. If the employee is a non-resident you will need to check their visa status to ensure they have permission to work in Australia. The amounts that you pay the employee will need to have tax withheld from them. The amount of tax to withhold is dependent on registering to withhold tax and the visa status of the employee. Once you have registered with the ATO, your will receive a Withholding Payment number (WPN) and be required to complete Activity Statements on a regular basis and submit these to the ATO along with the monies withheld. The amount to withhold is usually at a tax rate of 15% from the first dollar, up to $45,000. There is no tax-free threshold. The amount of tax to withhold will be different if the employee doesn’t have a Tax File Number or has a different visa sub class. If the employer fails to register, then the tax amount to withhold will also vary. You can check your workers visa status using the Visa Entitlement Verification Online (VEVO) tool found at www.border.gov.au for more details.
Hiring employees to assist with duties around the house can be rewarding to get back the time you need for your chosen activities, and also rewarding for the employee to obtain Australian work experience. If you would like to have a discussion further, about this topic then please contact our office.