It’s time to bust some myths about nanny payroll and taxes that will help put you at ease as you contemplate hiring a nanny.
What is Payroll?
Payroll is the process of paying an employee for their work. You can send them a Venmo transfer, give them an envelope of cash (but really- who has time to go to the bank each week?), or set-up an automated system. Whatever you decide, you need to do something.
It Takes So Long!
If you're hiring someone to give you the time you need back in your day - why spend it processing payroll when there are services that can help?
The process of paying an employee has been made easy for you with the availability of payroll services. You submit the worked hours and the wage agreed upon and systems like Nanny Lane do the rest.
Does Payroll Mean I Need To Pay Taxes?
We get these questions ALL of the time. The simple answer is - why wouldn't you want to?
In many states, child care can be a tax deduction. If you don't file, you’re probably leaving money on the table.
Who Else Does It Benefit?
Setting up a proper payroll system also helps your nanny establish an employment history. Your nanny can then be eligible for Social Security income, Medicare, and unemployment benefits. They can get a credit card and have the financial flexibility needed to take out loans for things such as cars.
Paying taxes on earned income helps the community. By paying taxes, it puts money back into roads, schools, and infrastructure - all to improve the community where you're raising your children.
Legally paying your nanny gives you, and them, one less thing worrying you. Which means you can spend more time making sure that your family gets the proper care.