Household Employee Rules Australia 2025: Tax, Super & Legal Guide

With more Australians seeking flexible home help, hiring household employees—like nannies, cleaners, and gardeners—has become increasingly common. But employing someone in your home isn’t as simple as paying them an hourly wage: it comes with a raft of legal, tax, and superannuation responsibilities that can catch even the most diligent families off guard.

Who Counts as a Household Employee?

In 2025, the Australian Taxation Office (ATO) defines a household employee as anyone you hire directly (not through an agency or company) to perform ongoing duties in or around your private residence. This includes:

• Live-in or part-time nannies and babysitters

• Cleaners and housekeepers

• Gardeners and handymen

• Private chefs and personal carers

If you’re paying someone regularly and directing their work—even if they only work a few hours a week—they’re likely your employee, not a contractor. This distinction matters for tax and legal reasons.

Your Obligations as a Household Employer in 2025

Employing someone in your home triggers several important responsibilities. Here’s what you need to consider:

1. PAYG Withholding and Tax Reporting

You may need to register for Pay As You Go (PAYG) withholding with the ATO and deduct income tax from your employee’s wages. In 2025, the ATO has streamlined digital reporting for household employers, making it easier to lodge payments via Single Touch Payroll (STP) using approved software or the myGov platform. Failure to withhold the correct amount can result in penalties.

2. Superannuation Guarantee

If you pay your household employee $450 or more (before tax) in a calendar month, or if they work more than 30 hours per week, you must pay the Superannuation Guarantee (SG). The SG rate is 11.5% in 2025. Super payments are due quarterly and must go to a complying super fund chosen by your employee.

3. Workers’ Compensation and Insurance

Each state and territory has its own rules about workers’ compensation insurance for household employers. In NSW and Victoria, for example, you must take out a household workers’ insurance policy if you hire anyone to perform regular work. This covers you and your employee in case of injury on the job.

4. Fair Work and Minimum Standards

Household employees are entitled to the National Minimum Wage, which is $24.10 per hour in 2025, plus penalty rates and entitlements such as annual leave, sick leave, and notice of termination. Be sure to issue payslips and keep proper employment records, as Fair Work Australia has increased random audits in the home services sector this year.

Real-World Example: The Smith Family’s Nanny Hire

Consider the Smiths in Melbourne, who hired a nanny to care for their two children three days a week. They:

• Registered with the ATO for PAYG withholding

• Used a payroll app to pay their nanny and issue payslips

• Paid superannuation quarterly at 11.5%

• Took out household workers’ insurance through WorkSafe Victoria

By following these steps, they avoided fines and gave their nanny the security of full legal entitlements.

Tips for a Smooth Household Employment Experience

• Draft a written agreement: Outline duties, pay, hours, and leave entitlements.

• Keep detailed records: Use payroll software or a spreadsheet to track payments, tax, and super.

• Communicate openly: Discuss expectations and resolve issues early.

• Review annually: Revisit pay rates and conditions each year, especially as minimum wage rates change.

Recent Policy Updates and What to Watch in 2025

This year, the ATO is piloting a simplified online registration for household employers, expected to roll out nationwide by mid-2025. The Fair Work Commission is also reviewing the Domestic Worker Award, with potential changes to minimum entitlements for nannies and carers. Stay tuned for announcements that could affect your obligations and costs.

Conclusion

Hiring help at home can be life-changing, but it’s crucial to handle your employer duties correctly. With new digital tools and clearer legal guidelines in 2025, it’s easier than ever to stay compliant—if you know what to look for. Getting it right protects your household and your valued employees alike.