You may need to withhold tax from payments you make to household employees for providing domestic services. This includes nannies, carers, cleaners, gardeners, housekeepers or support workers directly employed by participants in the National Disability Insurance Scheme (NDIS).
Employee or contractor
Work out if your worker is an employee or contractor for tax and super purposes.
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 make a payment to them.
You don't need an Australian Business Number (ABN) if you are only employing household employees for providing domestic services. Instead, we will issued you a withholding payer number (WPN).
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).
You can then use the appropriate rates from the Tax tables to work out the PAYG withholding using the Tax withheld calculator.
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
- send us a completed annual report after the end of each financial year.