When accepting a role with a family, there are a number of key areas that you need to be mindful of to make sure you are not breaking the law and that you are being treated fairly and correctly. This could have a big impact for you down the track.
Employee vs Contractor?
If you are classified as an employee, you will have tax deducted from each pay. You may receive Superannuation and will be covered by insurance that your employer will need to take out. As a Permanent Employee, you will have access to annual leave and sick pay.
As an employee, your payslips will give you greater access to credit cards and loans. Should your employment be terminated, you will receive the appropriate termination pay and it may be easier for you to access government benefits, including maternity pay.
To determine whether you are an employee or contractor, you can use the ATO’s decision tool. If you are legitimately a contractor, you must provide a proper tax invoice to your client, showing your ABN. You will also need to put money aside to pay your annual tax and you may need to be GST registered. If you are unsure, call the ATO or seek professional advice.
Permanent vs Casual Employees
Your employer will determine if you are a Permanent or Casual employee. Casual work patterns are irregular, or the contract may be very short. Casual staff are not guaranteed hours and do not accrue annual or sick leave. For this reason, the minimum wage is 25% higher for Casual Staff.
If you are classified as a casual, you have the right to request to become Permanent after 12 months service.
You should make sure that you have an appropriate employment contract in place, signed by both parties. You rate of pay should be at or above the minimum award rate. Domestic Workers are covered under the Miscellaneous Workers Award. NDIS and Nursing staff are covered under other Awards.
How much tax will I have to pay?
Tax will be withheld from your pay in accordance with your own circumstances and depending on how much you earn. You can check the ATO’s simple Tax Calculator. You should keep track of any costs that you incur that you may be able to claim as a tax deduction on your tax return, such as the number of kilometres travelled in your own car while working, any training related to your work or any specific equipment that you need for your work.
Superannuation considerations
Super is calculated as 10% of wages and if you are over 18, it is compulsory when you receive more than $450 per month. The big exception is for Domestic Workers (but not nurses or NDIS workers), where super is only compulsory when employees work more than 30 hours per week.
In the case that superannuation is not compulsory, you should discuss this with your employer and consider whether you would still like to receive super (perhaps, by reducing your hourly rate).
Payroll compliance
Your employer needs to provide you a pay slip within 1 day of you receiving your pay. This should also show the amount of leave you have built up.
Insurance
If you are injured on the job, let your employer know in the first instance. They are required to have appropriate insurance, which is known as either “WorkCover” or “Workers Compensation Insurance” depending on the state that you are in.
Where can I get help or guidance with being paid properly?
CarePayCo is payroll service with clients across Australia. We facilitate the employee / employer relationship and handle all the tasks described in this article for you. It is not at all daunting with us at your side.
For more information or to get started go to CarePayCo.