piggy-bank-1595992_1920Q. My 14-year-old daughter who is in year 9 at High School is keen to start earning her own money. What should she be aware of in terms of legal requirements. Also any tips on encouraging her to save the earnings?

A. The minimum age for employment varies from state to state. The minimum age is usually 13 but in NSW and ACT, this doesn’t apply. Interestingly the entertainment industry and family business are nationally exempt from age restrictions.

There are limitations on what type of work she can do. Generally, she will be restricted to light work, such as running errands, office work, gardening or shop assistant. If your daughter was 11, she would be limited to delivering newspapers and advertising material or making pharmaceutical deliveries.

As she is under 15 it is against the law for an employer to require her to work on a school day more than 1 shift a day, more than a 4-hour shift and no work after 9 pm.

As she will be employed and is older than 12, she is required to have a tax file number (TFN). The quickest way for her to get a TFN is via the Secondary Schools TFN program. Contact your school for details.

Whatever work she intends on doing it is important to be aware of any industrial awards applicable to the industry she is working in and minimum pay rates.

Note as she is under age 18 and legally unable to enter into a contract, she should not be registering for work via Airtasker as it would breach their terms and conditions.

For tax purposes, her employer is obliged to issue an annual Group Certificate. If her income is high enough, tax should be withheld. Tax is levied at normal marginal tax rates as she is generating his own income. She is not obliged to submit a tax return if she is below the lowest tax threshold of $18,200. However, she can lodge an annual tax return and claim expenses as an adult tax payer.

As she is under 18, and working less than 30 hours a week, she is not entitled to receive Employer Superannuation support unless this is specified in an Award.

In terms of encouraging her to save for the future, goal setting is vital. Balancing short term and long term objectives will always be a challenge. Large longer term objectives like a car may be hard for her to contemplate. Encourage your daughter to form the habit of prioritizing spending now away from instant gratification.

If you are looking to encourage her to save for a larger purchase, consider matching savings she makes. For example, every $20 she saves match or part match into her bank account.

Demonstrate the basics of compound interest and she will get a greater appreciation of the value of saving.

Open a high-interest savings account, demonstrate how interest works and equate it back to hour worked to earn that money. For longer term savings objectives, 3 years + consider looking at investment trusts with exposure to higher growth assets such as shares. As she is under 16 they will need to be held in trust.

For further information on financial literacy for Secondary School Students, visit www.moneysmart.gov.au.