What Parents Should Know About Employing a Nanny in New Zealand

Hiring a nanny can be an exciting but complex process for any family. While finding the right person to care for your children is often the primary concern, it’s equally important to ensure the relationship is built on a solid foundation of mutual understanding and legal compliance. This is where a well-structured nanny contract comes into play. 

In New Zealand, nannies are considered employees, which means parents must comply with employment laws and ensure their nanny’s rights are protected. From outlining duties and hours to handling tax and leave entitlements, there are several important aspects parents should be aware of before employing a nanny. 

In this blog, we’ll guide you through the essential components of a nanny contract and explain key employment laws in New Zealand. By understanding these requirements, you can protect both your family and your nanny, ensuring a smooth and professional working relationship. 

Why it’s important to have an Employment Contract for your Nanny 

When hiring a nanny in New Zealand, having a formal contract in place is not just a legal formality, it’s a crucial step to ensure a smooth and professional working relationship. A nanny contract sets the foundation for clear communication, mutual respect, and defined expectations for both parties. Here's why: 

1. Clear Expectations 

A well-drafted contract eliminates guesswork by clearly outlining the responsibilities and duties of the nanny. Whether it’s the hours they are expected to work, specific childcare tasks, or additional household duties like meal prep and school drop-offs, everything is clearly defined. This ensures both the nanny and the parents are on the same page from day one, avoiding any confusion. 

2. Prevent Misunderstandings 

Without a contract, misunderstandings can easily arise regarding job roles, pay, or working hours. A contract provides a reference point to address any issues or disagreements that might come up. For example, if there’s a disagreement over overtime hours or weekend work, the contract can clarify how these situations should be handled, reducing the chance of conflict. 

3. Legal Protection 

A contract is a legally binding document that offers protection for both the parents and the nanny. In case of disputes, it acts as evidence of the agreed-upon terms, providing security for both parties. This legal protection is particularly important if there’s ever a need to terminate the employment, ensuring that both sides follow proper procedures. 

4. Peace of Mind 

Finally, having a contract in place gives both parents and nannies peace of mind. Parents can rest assured that their nanny understands their responsibilities and obligations, while the nanny knows their rights and entitlements. It sets the tone for a professional relationship, helping to build trust and respect between both parties. 

A nanny contract is more than just a piece of paper, it’s a vital tool for fostering a stable, professional, and legally compliant employment relationship from the outset. 

What Should Be Included in a Nanny Employment Contract 

A nanny contract is more than just a formality—it's a vital document that lays out the terms and conditions of your nanny’s employment. It should cover all the details necessary to ensure both parties have a clear understanding of their rights and responsibilities. Below are the key components that every nanny contract in New Zealand should include: 

1. Job Description 

The contract should clearly define the nanny’s role and responsibilities. This might include tasks like: 

• Childcare (feeding, bathing, bedtime routines) 

• Educational activities (helping with homework, organising playdates) 

• Household duties (meal preparation for the children, tidying up play areas) 

Make sure to be as specific as possible, so there’s no ambiguity about what’s expected. Sometimes it might feel like overkill but having it all documented will avoid difficult situations in the future. 

2. Working Hours 

It’s essential to include the expected working hours in the contract. Specify whether the position is full-time, part-time, or casual. Outline daily start and finish times, any flexibility required, and provisions for overtime or additional hours. If weekend or holiday work is expected, ensure this is clearly stated, along with any compensation arrangements for such shifts. 

3. Remuneration 

A nanny’s pay should be clearly defined, including: 

• Hourly rate or salary: Ensure this complies with New Zealand’s minimum wage laws. 

• Payment frequency: Whether wages will be paid weekly, fortnightly, or monthly. 

• Overtime rates: If applicable, specify how overtime will be compensated. 

• Bonuses or raises: Outline any potential for performance-based bonuses or periodic salary reviews. 

It’s also important to mention whether the nanny will be paid for additional responsibilities outside of standard working hours, such as babysitting or travel. If you need a guide around how much a nanny should be paid in 2024, you can check out the Caresies Guide here. 

4. Leave Entitlements 

Under New Zealand law, nannies are entitled to certain types of leave. Your contract should clearly outline these entitlements, including: 

• Annual leave: A nanny will be entitled to four weeks of annual leave each year, based on their working pattern. 

• Sick leave: A nanny would be entitled to 10 days sick leave each year. Whilst there are potentially some changes coming for this, 10 days is the amount of leave an employee could take, even if they only work one day per week. 

• Public holidays: Specify which public holidays the nanny will be entitled to and how these will be compensated if worked. 

Ensure you’re compliant with New Zealand’s minimum legal leave entitlements when drafting these sections. 

5. Notice Period 

A clear notice period for termination by either party is essential to avoid any sudden surprises. Standard notice periods in New Zealand often range from two to four weeks, but this can vary depending on the agreement. It’s important to outline: 

• The length of notice required if the nanny wishes to resign. 

• The notice period if the parents choose to terminate the contract. 

Also, mention any conditions under which immediate termination (without notice) would be acceptable, such as serious misconduct. 

6. Household Rules 

Each household operates differently, so it’s useful to include any specific house rules or preferences in the contract. For instance: 

• Screen time limits: Any restrictions you may have for the children regarding TV or tablet use. 

• Dietary preferences: If the children follow a particular diet, such as gluten-free or vegetarian or if they have any allergies. 

• Pet care: If the nanny is expected to help with pets, make sure this is clearly noted. 

Being upfront about household rules will help the nanny adapt quickly and provide care in line with your family’s values and expectations. 

Understanding Employment Law for Nannies in New Zealand 

When hiring a nanny in New Zealand, it's important to be aware of the country's employment laws to ensure that you are compliant and providing fair working conditions. Since nannies are considered employees, their rights are protected under New Zealand’s employment laws. Here are the key legal points parents need to understand: 

1. Employment Status: Employee vs. Independent Contractor 

In most cases, a nanny is classified as an employee, not an independent contractor. This distinction is important because it affects their rights and your obligations as an employer. As employees, nannies are entitled to minimum wage, holiday pay, sick leave, and other benefits outlined in New Zealand’s employment law. 

Be wary of attempting to classify a nanny as an independent contractor to avoid these obligations, as this could result in penalties if challenged legally. 

2. Minimum Wage Compliance 

In New Zealand, you must ensure that your nanny is paid at least the current minimum wage. As of 2024, the minimum wage is subject to annual review, so make sure to check current rates when establishing pay. Even if you’re offering room and board, the nanny’s wages must meet or exceed the legal minimum wage. At 1 April 2024, this increased to $23.15 per hour. 

3. Holiday Pay and Sick Leave 

Nannies are entitled to the same leave benefits as any other employee in New Zealand. This includes: 

• Annual leave: Full-time nannies are entitled to four weeks of paid annual leave after 12 months of continuous employment. 

• Public holidays: If your nanny works on a public holiday, they are entitled to time and a half pay and may also be entitled to a day in lieu (an extra day off). 

• Sick leave: Nannies are entitled to at least 10 days of paid sick leave per year after the first six months of employment, which accumulates year on year. 

Make sure these entitlements are clearly mentioned in the contract and that they are in line with New Zealand employment law. 

4. KiwiSaver Contributions 

If your nanny opts to join KiwiSaver, you are required to make employer contributions. As of 2024, the employer contribution is set at 3% of the nanny’s gross salary, in addition to their wages. While KiwiSaver is optional for employees, you need to be prepared to contribute if your nanny chooses to enrol.  

If your nanny is an au pair, or not a permanent resident in New Zealand, then they might not be eligible to contribute for Kiwisaver, so it’ll be important to check this prior to their first pay. 

5. Tax Obligations: PAYE and ACC Levies 

As an employer, you are responsible for handling Pay As You Earn (PAYE) taxes for your nanny. This means you will need to deduct the correct amount of tax from their wages and pay it to Inland Revenue. You'll also need to pay ACC levies to cover workplace injury insurance. 

Managing payroll, tax, and compliance can be complex, which is why many families choose to use payroll services like Pay The Nanny, which simplifies these processes and ensures you meet your obligations. 

Best Practices for Maintaining a Strong Employment Relationship with Your Nanny 

Once the contract is in place and the legalities are covered, maintaining a positive and professional relationship with your nanny is essential. This goes beyond simply following the rules—it’s about creating a collaborative and respectful work environment. Here are some best practices to foster a strong and lasting relationship with your nanny: 

1. Ongoing Communication 

Regular and open communication is the foundation of any successful employment relationship. Set aside time for periodic check-ins to discuss how things are going, whether there are any concerns, and how both parties feel about the arrangement. This could be a monthly or quarterly conversation, depending on your needs. 

During these check-ins, you can address any changes in responsibilities, hours, or challenges the nanny might be facing. It’s also an opportunity to provide feedback and recognise the nanny’s hard work. Open dialogue helps to resolve small issues before they turn into larger conflicts and ensures both sides feel heard. 

2. Contract Reviews 

As your family’s needs change, it’s important to review and potentially revise the nanny’s contract. Whether it’s adjusting working hours, increasing pay, or adding new responsibilities, ensure that these changes are clearly documented in the contract and mutually agreed upon. 

A contract review is especially important if: 

• Your nanny’s duties have significantly increased. 

• You’ve welcomed a new child into the family. 

• The nanny has worked with you for an extended period and deserves a pay review. 

Regularly reviewing and updating the contract ensures that both parties remain in alignment and prevents any misunderstandings. 

3. Respecting Boundaries 

Although nannies often become a trusted part of the family, it’s crucial to maintain professional boundaries. Respect the nanny’s personal time by ensuring they are not expected to work outside of their agreed hours without prior arrangement. Avoid assuming that the nanny is always available, especially during evenings or weekends, unless this has been discussed and compensated accordingly. 

Setting clear boundaries helps maintain a healthy balance between the personal and professional relationship and ensures that the nanny feels respected in their role. 

4. Creating a Positive Work Environment 

Like any employee, nannies thrive in a supportive and positive work environment. Show appreciation for their hard work through gestures such as: 

• Acknowledging their efforts verbally. 

• Offering occasional bonuses for outstanding work. 

• Giving small tokens of appreciation, such as a card or a thoughtful gift on special occasions. 

Creating a warm, welcoming, and respectful environment will not only enhance your nanny’s job satisfaction but also foster loyalty and long-term commitment to your family. 

5. Conflict Resolution 

Disagreements or misunderstandings can happen in any working relationship, but how you handle them is key. Approach conflicts with a calm and open mindset, and be willing to listen to your nanny’s concerns. Avoid reacting emotionally, and instead, focus on finding a solution that works for both parties. 

If the issue is related to the contract, refer back to the agreement to guide the conversation. If the problem cannot be resolved through discussion, consider seeking advice from a third party, such as an employment expert or mediation service. 

How Pay The Nanny Can Simplify the Process 

Navigating nanny contracts, payroll, and employment law can feel overwhelming, but the good news is that there are services available to help make the process easier. Pay The Nanny offers a comprehensive solution for managing your nanny’s employment, ensuring that everything from contracts to payroll is handled smoothly and in compliance with New Zealand law. Here’s how Pay The Nanny can help: 

1. Simplified Payroll Management 

Managing your nanny’s payroll manually can be a time-consuming and complex task, especially when it comes to tax obligations, KiwiSaver, and leave entitlements. Pay The Nanny takes the stress out of payroll by automating the entire process, including: 

• Calculating wages based on the hours worked. 

• Handling tax deductions (PAYE) and paying them directly to Inland Revenue. 

• Managing ACC levies, ensuring your nanny is covered for workplace injury. 

• KiwiSaver contributions, making sure you’re meeting your obligations as an employer. 

This means you can be confident that your nanny’s wages are calculated correctly, with no risk of mistakes or missed payments. 

2. Nanny Contracts Made Easy 

Pay The Nanny offers templates and tools to help you create a legally compliant nanny contract that covers all the necessary details, including: 

• Job description and responsibilities. 

• Working hours and leave entitlements. 

• Remuneration and notice periods. 

• Any specific household rules or preferences. 

With Pay The Nanny’s contract services, you can be sure that your contract meets all legal requirements and clearly outlines the terms of employment, ensuring that both you and your nanny are protected. 

3. Compliance with New Zealand Employment Law 

Staying compliant with New Zealand employment law is essential, but it can be challenging to keep track of changing regulations and ensure that you’re meeting all your obligations as an employer. Pay The Nanny stays up-to-date on the latest legal requirements and ensures that your payroll and contract practices are always compliant. 

Whether it’s calculating holiday pay, ensuring your nanny receives the correct amount of sick leave, or managing tax deductions, Pay The Nanny handles it all for you, reducing the risk of errors or penalties. 

4. Ongoing Support 

Managing a nanny’s employment doesn’t end once the contract is signed. Pay The Nanny provides ongoing support for parents, helping with everything from adjusting pay rates and managing leave to addressing any changes in employment status. If any issues arise, such as questions about leave entitlements or tax obligations, their team is there to offer guidance and ensure everything runs smoothly. 

5. Tailored to Your Family’s Needs 

Every family is unique, and Pay The Nanny offers nanny payroll services that can be tailored to meet your specific needs. Whether you need full payroll management or just help with drafting a contract, Pay The Nanny can create a package that works for you, providing the exact level of support you need. 

Conclusion 

Employing a nanny in New Zealand comes with responsibilities, not just in terms of finding the right person to care for your children, but also in ensuring that you follow the correct legal and contractual processes. Having a well-structured nanny contract and understanding your obligations under New Zealand employment law are crucial for fostering a successful, long-term working relationship with your nanny. 

From setting clear expectations to complying with minimum wage, leave entitlements, and tax obligations, the contract ensures that both parties are protected and on the same page. Maintaining strong communication, regularly reviewing the contract, and respecting professional boundaries will help nurture a positive and collaborative environment. 

For parents looking to simplify this process, Pay The Nanny offers an easy, stress-free way to manage payroll, draft compliant contracts, and ensure that you’re meeting all your legal obligations. By using a trusted service, you can focus more on family life while leaving the complex administrative work to the experts. 

Whether you're hiring a nanny for the first time or managing an ongoing employment relationship, having the right tools and knowledge in place will ensure a seamless experience for you and your nanny. If you’re looking for the perfect nanny, you’ll be sure to find someone on Caresies. Get setup today.