Nanny Lane Payroll FAQ
Overview
Payroll Tax Accounts and Filings
What We Offer
What does Nanny Lane Payroll include?
Nanny Lane Payroll includes:
- Processing of your nanny’s payroll on a pay cycle of your choosing
- Transferring of payments by direct deposit
- Payroll documents for both employers and employees (pay stubs, payroll registers)
- Federal and State tax calculations and completion of corresponding monthly and quarterly tax filings
- Production of year-end documents (W2, W3, Schedule H)
- Seamless handling of multi-family payments
- A dedicated payroll expert to answer any inquiries
Is Nanny Lane Payroll offered in all states?
Yup, we offer services in all states! If you have state-specific questions, please do not hesitate to ask.
Can I use Nanny Lane Payroll if I did not find my nanny or the other family in my nanny share on Nanny Lane?
Definitely! Whether you found your nanny or nanny share on our platform or somewhere else, we would be happy to do your payroll.
Can I use Nanny Lane Payroll even if the other family in my nanny share will not be?
Yes! We will gladly manage your payroll needs, regardless of how the other family in your nanny share would like to handle their payroll.
Can Nanny Lane Payroll accommodate an unequal nanny share agreement?
Definitely! Upon registration, please let us know of your default split of hours (i.e., 40/60, 67/33, etc.). You can update us each pay period if there are any changes, such as additional hours for one family.
If my nanny only works part-time, do employer payroll requirements apply to me?
In short, yes. There are federal and state thresholds (dependent on state) for gross pay that must be met before it is required for certain taxes to be paid for household employees. That being said, these thresholds are always quite easily achieved, unless your employee works very, very occasionally.
How much do additional employees cost?
Additional employees can be added to your membership for $25/month.
Are there any setup fees?
Nope! There are no setup fees.
Payroll Tax Accounts and Filings
Are there additional fees for tax filings?
Nope! Tax filings are included in our monthly fee.
Does Nanny Lane Payroll include year-end documents (including W2)?
Yes, we will produce all necessary documents at year-end including the W2, W3, and Schedule H. We will also send the W2 directly to your nanny.
Does this service include withholding and remittance of all Federal and State taxes?
Yes, we will withhold and remit all necessary Federal and State taxes on your behalf including Medicare and Social Security (FICA), Federal Unemployment and Income taxes, and State Unemployment and Income taxes.
Will Nanny Lane Payroll apply for the necessary Federal, and State Tax accounts on my behalf?
We can apply for your Federal Employer Identification Number on your behalf. State tax account application requirements vary by state. If we can apply for your state tax account(s) on your behalf, we will do so. If not, we will provide you with steps to complete the application process.
What if I have existing Federal and/or State tax accounts?
Great! Please let us know during the registration process. We’ll ask that you provide us with a letter or notice from the relevant tax agency with your legal name, address, and account number for our records.
Nanny Share Payroll
How much do I save by sharing a nanny?
Nanny share reduces the cost of the employee’s gross wage for each family. The price of a nanny share is roughly 2/3 of the costs of a nanny for each family.
In a nanny share, do both families pay the monthly service fee?
Yes, each family pays the monthly service fee, as the law requires each family to be treated as a separate employer with individual tax withholdings and nanny filings.
Do both families in our nanny share need their own Federal EIN and State tax accounts?
Yes, both families will require individual accounts. Since each family is considered a separate employer by the law, the tax accounts cannot be shared.
Can I use Nanny Lane Payroll even if the other family in my nanny share will not be?
Yes! We will gladly manage your payroll needs, regardless of how the other family in your nanny share would like to handle their payroll.
How do families in a nanny share split the nanny’s pay?
For our nanny share families, we split the number of hours to reflect the total hourly rate.
For example, Family A and Family B share a nanny for 10 hours per week at a shared hourly rate of $25/hr. The nanny makes a total of $250 per week (10 hours * $25/hr). To accurately reflect the nanny’s hourly rate, Family A and Family B pay for 5 hours each at $25/hr totaling $125 each, and the nanny is still paid $250 per week in total.
Nanny Employment
What is the total cost of employing a nanny?
You can calculate the total out-of-pocket cost of hiring a nanny by adding the employee’s gross wages, the employer’s portion of taxes, and the cost of processing the payments. You can either use a payroll service like Nanny Lane, a CPA (Certified Public Accountant) or navigate the payments and taxes yourself. If applicable, Worker’s Compensation Insurance should be added to this.
Do I need to withhold income taxes from my nanny?
No, income taxes are not required to be withheld at source from household employees. However, income taxes must be withheld at the request of an employee. Even though this is not required, we highly recommend withholding income taxes, as employees will be responsible for remitting their estimated income tax payments otherwise. Like other types of employees, household employees have the option of completing their withholding form(s) as “exempt” from tax, based on their personal tax situation.
Is it possible for me to pay my employee’s portion of FICA (Medicare and Social Security) taxes?
No, unfortunately, we cannot support household employers who would like to pay their nanny net of FICA (Medicare and Social Security) taxes. However, we’re happy to work with you on implementing this. We'll increase their gross wages to cover the portion of Medicare and Social Security taxes.
Do I need Workers’ Compensation Insurance for my household employee?
Workers’ Compensation Insurance requirements vary by state. However, in many states, it is a requirement for employers with one or more employees. In most states, Workers’ Compensation Insurance can be obtained through a private insurance company.
Does Nanny Lane Payroll handle Workers’ Compensation Insurance?
Currently, we do not handle Workers’ Compensation Insurance.
Is my nanny considered an Independent Contractor?
No, nannies are considered household employees by the IRS. An independent contractor has sole control over their schedule and has no supervision over their services. Because your nanny works around your schedule and has their services supervised by you, they are considered your employees.
Does my nanny qualify me for reimbursement under my Dependent Care FSA (Flexible Spending Account)?
In short, maybe. We recommend checking your plan documents or talking with your plan administrator, as plans vary. If you qualify, we can provide you with a Dependent Child Care FSA statement for you to submit to your plan for reimbursement.
