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Withholding from payments to household employees

Householders may have to withhold tax from payments to household employees such as nannies, gardeners or housekeepers.

Last updated 23 November 2022

Employee or contractor

You may need to withhold tax from payments you make to your household employees for providing domestic services. This includes nannies, carers, cleaners, gardeners, housekeepers or support workers directly employed by participants in the national disability scheme.

To work out if your worker is an employee or contractor for tax and super purposes, see our Employee or contractor page.

You do not need to withhold amounts if you pay a third party, such as a nanny agency, which provides and pays your household workers.

Register for PAYG withholding

If your workers are employees, you must apply to register for PAYG withholding before you are required to withhold an amount from a payment.

You do not require an Australian Business Number (ABN) if you are only employing household employees for providing domestic services. In these cases you will be issued with a withholding payer number instead of an ABN.

Tax file number (TFN) and withholding declarations

Each household employee should complete a Tax file number declaration. This form will give you information to help you work out how much to withhold from your employees' payments.

An employee may also complete a Withholding declaration to tell you what adjustments to make to the standard amount of tax you withhold from their payment.

Amount to withhold

To work out the correct tax amount to withhold from payments you make to employees, use the information employees have given you in their TFN declaration form and withholding declaration form (if applicable).

For more information you can also check our:

Super requirements

You may be required to pay super guarantee contributions for your household workers.

Reporting and paying withheld amounts

Once you're registered for PAYG withholding, we'll send you an activity statement, usually on a quarterly basis, that you will need to complete and return to us.

Additionally, you will also need to:

  • pay us the amounts withheld from your employees' payments
  • provide your employees with a payment summary, and
  • send us a completed annual report after the end of each financial year.