Au Pair tax query

[Liamos]

Not sure if this is the correct forum.

We have had a spanish au pair for the last 2 years who is moving on to another family in Ireland. She is only now looking for a PPS no.

- Should she have applied for one 2 years ago when she arrived in Ireland?
- Are we breaking any tax laws by not registering as her employer? (She was earning €120 per week)

In order for her to now get a PPS no., she need to provide proof of address ie a letter from us stating she lives with us.

- Is this drawing the attention of the Revenue onto us?

Thanks

 

[Guns N Roses]

Extract from Citizens Information Website:

"An au pair is a young person who is treated as a family member in exchange for certain services, such as a limited amount of light housework or help minding children. It is a voluntary arrangement between a private household and a private individual. The objective of the arrangement is to enable the au pair to experience a different culture and improve his or her foreign language skills.
There is no specific regulatory framework covering au pairs. An au pair is not a professional nanny or child minder. Au pairs are not employees and there is no contract of employment between the host family and the au pair. The au pair is usually given room and board and paid weekly pocket-money. There are specialist private agencies that can assist you to source an au pair."

 

[Guns N Roses]

Should she have applied for one 2 years ago when she arrived in Ireland?

Perhaps. But as far as I know, it's not required by law.

Are we breaking any tax laws by not registering as her employer? (She was earning €120 per week)

No. You are not legally her Employer.

In order for her to now get a PPS no., she need to provide proof of address ie a letter from us stating she lives with us.

I would think it's a reasonable request to provide her with a letter.

Is this drawing the attention of the Revenue onto us?

I can't imagine why. Why would it? Your not her Employer.

 

[Guns N Roses]

It likely your former Au Pair needs to access Social Welfare or Health Services rather than the Revenue Service.

 

[Liamos]

Thanks for those very helpful replies. My only concern was that we were perhaps breaking some sort of Revenue law. The definition of an au pair as not being an employee is very helpful. I have no problem in providing her with a letter for proof of address.

Thanks again

 

[MaxRuby]

Hi: You said that the au pair is moving on to another family in your first post. I don't think you can provide a proof of address if she is no longer living with you. Perhaps the new family should provide that?

 

[Jim2007]

Extract from Citizens Information Website:

"An au pair is a young person who is treated as a family member in exchange for certain services, such as a limited amount of light housework or help minding children. It is a voluntary arrangement between a private household and a private individual. The objective of the arrangement is to enable the au pair to experience a different culture and improve his or her foreign language skills.
There is no specific regulatory framework covering au pairs. An au pair is not a professional nanny or child minder. Au pairs are not employees and there is no contract of employment between the host family and the au pair. The au pair is usually given room and board and paid weekly pocket-money. There are specialist private agencies that can assist you to source an au pair."

I would be more caucus on this - it is not a legal opinion and I would have concern about a number of aspects:
- the length of the stay: 2 years for a foreigner is on the long side
- did the family pay for language lessons
- is 120e per week typical pocket money
- the age of the person: is it typical for an au pair
- the nature of the work she did

The typical au pair will spend about six month abroad to experience the culture, learn or improve their language skill and then return home to continue their studies/life etc...

The fact that the person is still here two years later and is in the process of changing to yet another family is not what was envisaged in the paragraph you are quoting, I would suggest.

 

[Mongola]

An au Pair receives pocket money and is not subject to tax or PRSI. The length of the stay is absolutely irrelevant! I really don't think you have anything to worry about. I however do not understand why she needs you to provide proof of address as she is moving onto a new family, they should do this really. Either way, it does not matter!

 

[dublin66]

I'm not sure I would agree with the above statements regarding no tax obligation in connection with your au pair.

There is nothing on the Revenue website that states that au pairs are exempt from PAYE. Regulation 9 of the PAYE regs does state that cases where the au pair is paid less than €40 per week there is no obligation to deduct PAYE. Other than that a person is required to deduct PAYE where the person is engaged is domestic employment.

Domestic employment means employment by reference to which an employee is a domestic employee. Domestic employee means an employee who is employed solely on domestic duties (including the minding of children) in the employer's private dwelling house.

I am aware of cases where disgruntled former nannies have taken cases for redundancy (and won) and also looked for their full stamps. This can leave the employer with a significant employer PRSI liability and PAYE. For Paye it should be remembered that the definition of employer is a person who pays emoluments.

Best of luck.

 

[Guns N Roses]

I'm not sure I would agree with the above statements regarding no tax obligation in connection with your au pair.

There is nothing on the Revenue website that states that au pairs are exempt from PAYE. Regulation 9 of the PAYE regs does state that cases where the au pair is paid less than €40 per week there is no obligation to deduct PAYE. Other than that a person is required to deduct PAYE where the person is engaged is domestic employment.

Domestic employment means employment by reference to which an employee is a domestic employee. Domestic employee means an employee who is employed solely on domestic duties (including the minding of children) in the employer's private dwelling house.

I am aware of cases where disgruntled former nannies have taken cases for redundancy (and won) and also looked for their full stamps. This can leave the employer with a significant employer PRSI liability and PAYE. For Paye it should be remembered that the definition of employer is a person who pays emoluments.

Best of luck.

All of the above may be true but I have yet to hear of any case where an individual has been contacted by Revenue requesting taxes for utilising the services of an Au Pair.

 

[dublin66]

All of the above may be true but I have yet to hear of any case where an individual has been contacted by Revenue requesting taxes for utilising the services of an Au Pair.

I would totally agree with this. The issue normally comes to light when the au pair requests a P45 or goes looking for jobseekers benefit.

Unfortunately I have dealt with cases where "employers" had to rectify the situation by filing P35s etc (incl. PAYE, PRSI and interest) for number of years where a claim had been made by the au pair. It normally arises when there is some level of anger on the part of the departing au pair.

 

[Mongola]

A live-in/live-out nanny is completely different to an au pair! The au-pair is not considered as an employee. They receive pocket money and not a wage.

If it is a live- out au pair, then it is different. In fact, the term "live-out au pair" is wrong as there is no such thing. The person if living out is more a nanny and/or chilminder and is therefore entitled to minimum wage and subject to taxes/PRSI.