Family Members

Family members often work on dairy farms. Documenting the arrangement and paying fairly protects relationships, the business and future succession plans. 

State and federal industrial laws define 'family member' differently. All definitions include parents, spouses, children and siblings. Some also include grandparents of the employee or their spouse. 

Formal arrangements 

There is no legal requirement for a formal agreement with a family member. Even so, documenting expectations and rewards in writing is strongly recommended. See the Employees section for guidance. 

If federal industrial laws apply, the business must at least meet the National Employment Standards. It must also meet its obligations under federal taxation and superannuation laws, and state workers compensation laws.
Tip

Employing children is regulated by state laws, which set the minimum working age, the work allowed and the permitted hours. See the Federal and state industrial laws section and select the relevant state.

Pay and benefits 

Family members working on the farm are often overlooked when it comes to fair pay. This is common for young adults who leave school, return after study, or step in as parents step back. Many receive only a living allowance and miss years of asset building. 

Assuming a family member will inherit the farm can lead to underpayment and create conflict between siblings during succession. Paying a commercial wage reduces this risk. 

Tip

Always treat a family member's contribution commercially - even if that means transferring assets over time to make up for wages not paid.

Farm scenario

Barry and Linda bought a dairy farm to involve their family in the business. Their son Terry, completing a diploma in agriculture, wanted to commit full-time to getting the farm established.

With cash flow tight, the farm adviser valued Terry's contribution, after board and keep, at A$70,000 a year. The family paid him A$20,000 in wages and credited the remaining A$50,000, less tax, to the balance sheet in his name each year. This gave Terry an income and built assets that recognised his work.

Common questions

Do I need a formal agreement to employ a family member?

No. There is no legal requirement for a formal agreement with a family member, but documenting expectations and rewards in writing is strongly recommended. 

Should family members be paid a commercial wage?

Yes, where possible. Paying a commercial wage reduces the risk of underpayment and of conflict between siblings during succession. Where cash flow is tight, contributions can be recognised by transferring assets over time.

Can I employ my children on the farm?

Employing children is regulated by state laws, which set the minimum working age, the type of work allowed and the permitted hours. The Fair Work Act, National Employment Standards and Pastoral Award 2020 also apply.