Question

I am a sole trader carrying on business and am registered for GST.

I currently has no employees. However, I intend to employee a full-time nanny to assist my family. The nanny wants to be an employee.

Can I register for PAYG Withholding Tax under my current ABN - are the entitlements all the same - but they are just not tax deductible?

Answer

While it may be possible to employ a nanny through the business, the expenses relating to hiring the nanny would not be deductible if the nanny was simply minding your children. The expenses would be classified as private in nature even though they may allow you to spend more time working in your business. It is not possible to claim a deduction for expenses that are classified as being private in nature (refer section 8-1 ITAA 1997).

In saying that, the nanny can still be registered as an employee under your current ABN and their salary subject to PAYG withholding and super guarantee obligation.