Payroll for Au Pairs

Most parents struggle to achieve the right work-life balance. Cash, careers and kids are the key drivers and dependencies. Many of us spend most of our valuable time on tasks related to them, taking regular moments to weigh up whether our lives are on track.

Au pairs are a popular childcare solution because they tend to use up less of our precious monthly budget, save us time and can offer important cultural insights.

Find out how to sort paying your number one helper as we examine the issues around employing an au pair and au pair payroll.

What Is an Au Pair?

It’s worth taking a moment to understand the literal meaning of “au pair.” The term is French and means "on a par with" or “equal to."

The inference is that the relationship with your au pair is on the same level as other members of the family. That means, in effect, that your au pair becomes a fully-fledged member of the household while they’re staying with you.

Au pairs are often younger adults who come to work from foreign countries, typically those in Europe or North America. They may want to improve their language skills, discover more about a new culture and earn a little money on the side to go travelling.

What families get in return is help with a number of useful tasks to support them. These include:

• Valuable childcare hours
• An in-house babysitter to help working parents
• Help around the house with housework and meal preparation
• The opportunity to engage with someone from a different country

How Does an Au Pair Differ from a Nanny?

Many nannies consider their job as a profession. They often build up relevant qualifications in childcare and are thus able to command a higher wage than an au pair. For them, being a nanny is a career choice they’ll stick with for many years.

Au pairs tend to work for shorter 6 or 12-month stints rather than for several years with the same family as some nannies do. Au pairs don’t necessarily have to have specific qualifications related to looking after children.

Unlike nannies, au pairs tend to “live in” with the families that employ them. The majority are typically not from New Zealand or Australia. In contrast to nannies, au pairs often travel to work overseas on a Working Holiday Visa.

Are Au Pairs Employees?

Au pairs have the same status as any other employees. That means you have to treat them fairly by paying them at least the minimum hourly rate, by sorting their taxes and by giving them holidays and sick leave.

What you can also do is include board and lodging as part of the payment you make to your au pair. That reduces the amount of actual cash you’ll be paying out on their salary each month.

It will be your responsibility to ensure an au pair has the right to work in that role in New Zealand. You’ll also have to make sure all the required police checks on your new au pair are satisfactory.

ACC, Tax Numbers and Outsourcing Au Pair Payroll

You must make sure that your home is a safe place for your au pair to work in. You’ll need to pay your au pair’s ACC to cover them if they have an accident.

If paying an employee is new to you, then making an inadvertent slip-up is relatively easy. You need to be across PAYE, how to pay your au pair’s salary and ensure your au pair has an Inland Revenue Department (IRD) tax number.

Understanding and implementing all these processes yourself can take up valuable time you may not have. That’s why we would always encourage anyone hiring an au pair to use a nanny and au pair payroll service like Pay The Nanny.

How Much Will I Need to Pay My Au Pair?

Along with board and lodging, an au pair will expect to receive between NZ$230 - 290 per week. These figures are approximate. The exact cash amount will depend on their working hours and the tasks you expect them to carry out.

Au pairs will expect to continue receiving their salary if they’re sick or on holiday. The weekly rates we’ve used are net figures meaning there'll be taxes and potential benefits to pay on top of them.

How Does an Au Pair’s Payroll Work?

The short answer to this question is that an au pair’s payroll operates in the same way as any other employee such as a nanny. There is a way to make the whole process much simpler.

That’s by outsourcing or contracting out all au pair payroll processes to Pay The Nanny. Pay The Nanny would be responsible for paying your nanny and deducting taxes payable to the IRD. For tax purposes, the relationship will be between Pay The Nanny and the IRD.

This frees parents up to concentrate on looking after the family by going out to work and spending as much time as they can with kids. It removes the stresses and strains of ensuring tax compliance.

How Much Does an Au Pair Cost?

We’ve crunched the numbers for you so that you can see at a glance the cash outlay you’re going to have to make each week for an au pair. Here are the figures you need:

The figure in the “weekly cost to families” column includes the net amount your au pair will receive from you plus all taxes and charges. What it excludes is the figure you will be charging your au pair for board and lodging.

Do I Really Have to Give My Au Pair Leave and Sick Pay?

Your au pair has an entitlement to annual leave and sick pay in the same way as any other employee. If you choose to outsource your au pair payroll, Pay The Nanny will keep track of this along with potential time-off for Public Holidays so that the correct allowances and payments always happen on time.

What Tasks Can an Au Pair Undertake?

The key role of an au pair is the care of children. Let’s look at a typical day. This might begin with waking up the kids, helping them to get dressed and ensuring they brush their teeth. An au pair might then have to:

• Prepare breakfast and a packed lunch
• Supervise mealtimes
• Unpack and reload the dishwasher
• Drop off and pick up the children from school or after activities
• Run errands such as picking up groceries
• Carry out light housework like tidying up toys and cleaning up the kitchen
• Organise and tidy up the kids’ bedrooms including changing sheets
• Supervise and play with the kids in the evenings
• Read stories to the children and help them with their homework
• Do the laundry, hang up, fold and put away clothes
• Babysit while parents are out

It is up to individual families to decide what’s going to work best for them. They need to be sure that their expectations are realistic and fit in with the working hours they have allotted to their au pair.

Do I Need an Employment Contract With My Au Pair?

We would always recommend having an employment contract with your au pair. It manages expectations for both families and their au pairs. It provides clarity and can be a useful reference point while your au pair is living with you.

Clarity is key, so make sure you list all the important points. These include:

• How many hours a week you expect your au pair to work
• The times of day you want your au pair to work
• Start and end dates
• The salary details with references to annual leave, sick pay, board and lodging
• Issues around driving your car
• The key duties you expect your au pair to carry out
• What happens if either party wishes to terminate the contract

If you choose to outsource your au pair payroll to Pay The Nanny, we can provide you with templates to help you with your contract. You can use these as a starting point for the arrangements you make with your au pair.

I’m Stuck! Can Pay The Nanny Help Me?

Making a formal relationship with the person you’re entrusting your children to can feel very daunting. It’s a smart move to ensure that you pay your au pair correctly and understand your obligations as their employer.

We know that busy families have little or no time to handle the administrative tasks that go into paying an au pair. That’s where we can step in and help. We’ll sort everything for you so that you can be sure that all taxes, charges and au pair payroll issues are compliant.

Get in touch with us now and find out how we can help you with employing an au pair and with sorting your au pair or nanny payroll.