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Household employee payroll is a legal imperative, as well as the right way to treat your valued household employee. Although it is necessary, it is often a headache and a hassle. You can combat the hassles of household payroll by outsourcing to specialists. There are a number of benefits to outsourcing household your payroll needs, including the five listed below.
When you hire a nanny, senior caregiver, or other household staff, you immediately become an employer subject to all tax and labor laws in force. Unfortunately, the intimacy of the relationship can often induce the parties to cross legal boundaries, and these actions can eventually get the family into hot water.
Updated 31 December 2019
Every year HomeWork Solutions prepares a "what's new or changed" roundup of household employment tax laws and benefit information.
The IRS annually reviews, and adjusts as necessary, the wage payment threshold that obligates a family to pay Social Security and Medicare taxes and issue employees W-2 forms. This threshold will increase to $2200 for 2020, the first increase in 3 years.
As a nanny, you are required to wear several different hats: authoritarian, event planner, cook, playmate, and more. During your employment, you may also be asked to step in to be an overnight nanny occasionally. If you are okay with adding occasional overnight stays to your job duties, be sure to talk about this at the time you are first hired.
WE BELIEVE THAT LEGAL NANNY PAYROLL:
Today's families want to assist their aging loved ones to safely age in place, and increasingly hiring senior caregivers to provide care and support is the ideal solution. There are many misunderstandings and misconceptions about the relationship with the caregiver and their payroll deductions. Many people think that their caregiver is not an actual “employee” and that they can just pay them in cash and call it good. Hiring a caregiver, for your aging loved one, whether they are an live-in caregiver, or one that works a set number of hours per day, means that you will need to understand the importance of senior care payroll deductions. Here are some must-knows about paying your senior caregiver.
The City of Philadelphia joins 10 states and two other cities with legislation known as a Domestic Worker Bill of Rights. This legislation is part of a decade long community level movement nationwide to establish basic worker protections to the growing domestic services industry. While the numbers of nannies and housekeepers remains stable, the in-home senior care component of the domestic services field continues to experience vigorous growth as aging baby boomers overwhelmingly prefer to "age in place," therefore requiring senior caregivers to help them remain safe and independent.
You’ve hired a nanny and now comes the details of getting payroll set up with proper taxes withheld. It might seem like a good idea to pay your nanny partly on the books with the rest of payments off the record, because it could save you on taxes while still contributing to her work history. However, there are a variety of reasons you should not go this route, which we cover here.
The health insurance marketplace continues to change, and starting 1 January 2020 employers of nannies, senior caregivers, and other household employees will have a new choice for assisting or supporting their employees with their health insurance and other health care expenses.
All employers in the U.S. have to pay unemployment tax. There are two versions – Federal and State. Federal unemployment tax (FUTA) is charged at a rate of 6% on the first $7000 in wages paid to an employee, in most cases though that rate is decreased to 0.6% (explained more below). State unemployment tax (SUTA) is handled in a similar way but each state controls their own rate and wage threshold.