Employing a nanny in New Zealand: pay, tax, holiday pay and the hours record

A nanny is usually your employee: what that means

Whether someone is an employee or a contractor is decided by the real nature of the arrangement, under section 6 of the Employment Relations Act 2000, not by what you call it. A nanny who works in your home, on hours you set, caring for your children the way you ask, and paid by you, looks like an employee on that test. Inland Revenue names nannies among the private domestic workers who are employees, and says a self-employed person cannot use the rules for them.

Being an employer at home brings the same core duties as in any business. Employment New Zealand's list for a first-time employer is the place to start: a written employment agreement, at least the minimum wage for every hour, holidays and leave paid correctly, records kept for six years, and good faith in how you deal with each other. None of it depends on the job being part-time or the employer being a family.

Registering with Inland Revenue, PAYE and KiwiSaver at 3.5%

The Income Tax Act 2007 has a special category for household staff. A private domestic worker is someone employed by the occupier of a home to work in or about it, not for the employer's business, and not in regular full-time employment. For them, section RD 16 says the employer does not have to withhold PAYE, and the worker pays it instead.

Inland Revenue draws the line at hours. Its private domestic worker works in your home, does work unrelated to your business, is paid directly by you, and works no more than 30 hours a week on average for each employer. That nanny is an "IR56 worker":

• they register with Inland Revenue as an IR56 worker, and you pay them their gross wages;
• each month they work out their own PAYE, file their employment information within 10 working days of the end of the month, and pay it by the 20th of the following month; and
• for KiwiSaver, they deduct their own contributions and can choose to make the compulsory employer contribution themselves, with no employer superannuation contribution tax on it.

Agree in writing that your nanny is handling their own tax this way, and whether the hourly rate allows for the KiwiSaver contribution.

Above Inland Revenue's 30-hour average, the IR56 route is not available, and you are an employer for tax in the ordinary way:

• Register as an employer with Inland Revenue as soon as you start, in myIR or on the IR334 form.
• Deduct PAYE from each pay, using the tax code your nanny gives you, and file employment information for every payday: within 2 working days if you file online, or 10 working days on paper. New employers can use paper for their first 6 months.
• Pay what you deducted by the 20th of the following month.
• KiwiSaver: deduct your nanny's contributions at the rate they choose (3.5%, 4%, 6%, 8% or 10%), and pay a compulsory employer contribution of at least 3.5% of gross pay for a member aged 16 to 64, with employer superannuation contribution tax taken off it.

To see what a year costs you, including KiwiSaver, ACC levies, leave and public holidays, the cost of an employee calculator works it out and turns it into a cost for each hour worked.

Minimum wage, holiday pay and public holidays

From 1 April 2026, every hour your nanny works must be paid at least $23.95 for an adult, or $19.16 on the starting-out or training rate. For a live-in nanny, the Minimum Wage Act 1983 also limits deductions for board or lodging: they cannot cut minimum-wage pay by more than the cash value your agreement fixes or, if it fixes none, by more than 15% for board or 5% for lodging.

Holidays and leave follow the Holidays Act 2003:

• Annual holidays: at least 4 weeks paid after each 12 months of continuous employment. Adding 8% to each pay instead is only allowed for a fixed term of under 12 months, or work so irregular that 4 weeks off cannot be worked out, so it does not suit a nanny on regular weekly hours.
• Sick leave: 10 days a year once your nanny has worked for you for 6 months, with bereavement leave on the same footing.
• Public holidays: if a public holiday falls on a day your nanny would normally work, they are paid for it without working. If they do work it, they get at least time and a half and an alternative holiday later.

Christmas and New Year bring four public holidays in quick succession. Our article on public holidays over Christmas and New Year walks through each day from an employer's side. Leave from 6 August 2028 moves to the Employment Leave Act 2026, but until then the Holidays Act applies.

The employment agreement and the hours record you must keep

Section 65 of the Employment Relations Act sets what a written individual agreement must include:

• both your names, and a description of the work;
• where the work is done, which for a nanny may include outings and school runs;
• the agreed hours, or the arrangements for when work is done;
• the wages; and
• a plain language explanation of how to resolve problems, including the 90-day period for raising a personal grievance, or 12 months for sexual harassment.

Write in anything else that matters at home: who handles tax, how late pick-ups or evening babysitting are paid, and notice on both sides. Employment New Zealand says to sign before your nanny starts.

Then the records. You must keep a wages and time record showing the hours worked each day and the pay for them, and a holiday and leave record, for six years. If your nanny's hours vary, the agreement alone is not enough: you need the actual hours, day by day. Our article on wage and time records for employers sets out every item.

The simplest source for those hours is your nanny's own log. Your nanny can keep it in Your Timesheets at jobtracker.co.nz, free on every plan: start and finish times, breaks and a note for each day, every change kept in the entry's history, and the week marked sent once they have given you the hours. You then copy the hours into your own wages and time record each pay, which stays your duty as the employer.

Nanny shares and agency nannies

In a nanny share, two families split one nanny. Settle in writing who the employer is. If each family employs the nanny for its own hours, each is a separate employer with its own agreement, pay, holidays and records. Inland Revenue's 30-hour average is counted for each employer, but its criteria also include working in that employer's home, so a family whose home is not where the care happens should check its tax position with Inland Revenue before relying on the IR56 route.

With an agency, ask the plain question: who employs the nanny? If the agency only introduces you and charges a placement fee, you are the employer and everything above applies. If the agency employs the nanny and invoices you for their hours, the agency handles PAYE, holiday pay and the records. That is a triangular arrangement, and because you direct the nanny's day-to-day work, you may be a controlling third party, which means a personal grievance about how you treated the nanny can be brought against you as well as the agency.

Hours you can both check