Knowledge Center

FAQ

• What may happen if I do not pay the nanny taxes?

  What happens if I don’t pay for my nanny taxes? Failure to report wages paid to a domestic service worker – including a nanny, senior caregiver, housekeeper and more – and failure to pay the nanny taxes compromises the validity of your personal income tax return. These taxes are included on your personal federal income… Read more »

• Is Health Insurance for My Nanny or Senior Caregiver Taxable?

  Many employers understand that key benefits such as employer paid health insurance is an important employee recruitment and retention tool. Is health insurance taxable? Household employers with fewer than 50 household employees may reimburse health insurance premiums obtained in the individual marketplace on a tax free basis utilizing either a Qualified Small Employer Health Reimbursement Arrangement... Read more »

• Do I have to pay payroll taxes for the cleaning lady that comes weekly?

  Video: Cleaning Lady...Employee or Independent Contractor? Is a regular cleaning lady subject to the nanny taxes? Is the cleaning lady or housekeeper a household employee? Any individual whom you employ to provide services in your home whom you pay directly AND whose total payments in the calendar year meets the IRS household employment threshold, $2,700... Read more »

• Great Options for Nanny Health Insurance Benefits

  More and more we’re getting nannies asking about how to get health insurance built into their compensation packages; we’re realizing many more employers asking how they can help with nanny health insurance benefits, too. That’s fantastic! Just knowing how to go about doing it is where things get confusing. Let's consider the question: what's a... Read more »

• Is a nanny bonus reported as wages?

  I gave our nanny a $2000 holiday bonus. Do I have to report the nanny bonus as wages, and will there be a tax on bonus payments? A nanny bonus payment IS considered taxable wages. “Wages” are defined by the IRS as all remuneration paid, including the cash value of all remuneration paid in any… Read more »

• What about tracking the nanny’s hours? What is required?

  Fair Labor Standards Act (FLSA) states that due to the nature of their work and duties, nannies and other household workers are employees, are hourly workers,  and are covered by minimum wage and overtime laws. The FLSA requires employers to maintain accurate and complete contemporaneous time records for tracking hours worked by an employee. When… Read more »

• How can I help my nanny build a retirement savings account?

  There are some practical ways an employer can help their nanny build a retirement savings account. The SEP-IRA Employers can set up a SEP-IRA to help build a retirement savings account for their nanny. The contributions are 100% funded by the employer. Sometimes employees will ask to ‘defer’ a raise and have the $50 or so… Read more »

• I Want to Apply for Unemployment Benefits. Will I Get Them?

  Your nanny family let you go. You think to yourself: how do I get unemployment benefits? The working arrangement between you and the family is considered employment at-will under U.S. common law unless the written work agreement specifies a term of contract (which is a horrible idea). In broad terms, at-will employment means that employment is… Read more »

• How do I calculate overtime for my salaried nanny? What about compensation for occasional overnights?

  Most regular nannies are paid on a guaranteed pay basis. What this typically means is that the family agreed to pay the nanny a pre-determined salary for a given number of hours in a pay period. The full time nanny work schedule is often more than 40 hours per week. It is important to remember,… Read more »

• My nanny wants net take home pay of $600 a week. What does that mean?

  Many household employees, including nannies, expect to negotiate a “net wage” or “net take home pay” agreement with their employer. The net take home pay agreement is a foreign concept for many nanny employers, and often the new employer does not fully understand the financial implications of a net pay agreement with the nanny or… Read more »