Help! Summer nanny payment method?
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Anonymous
| We are hiring a summer nanny to provide full-time childcare at our home over summer break. We have always done camps in the past so this is new territory for me. In talking to a couple of other families who have had summer nannies, it seems like they just handle payment through Venmo. Sounds easy enough - but is there a downside or risk to doing it this way, either for me (the employer) or for the employee? Would it be better to use a payroll service instead? Do I offer both options and leave it up to the person we hire to decide? I've read a lot online about the rules for household employees but it's confusing, especially bc a summer nanny is by definition a temporary position. Any feedback from people who have done this before would be helpful. Thanks! |
Anonymous
| Hi OP, I'm a nanny. If you decide to go through it under the table, better to pay through Zelle. |
Anonymous
You should not be a nanny at all. |
Anonymous
What? Do you do this? |
Anonymous
Isn’t that illegal? Should you be recommending something that is illegal as a childcare provider and on a forum? |
Anonymous
| Pay above table, have the taxes taken out, and make sure you have workers comp. |
Anonymous
| I really liked Homepay which is part of care dot come. They’ll provide you with all of the tax docs, too. |
Anonymous
|
First question - How much do you expect to pay her over the summer? There’s an IRS threshold, and if you’re below that for a quarter, you can pay cash. But it’s pretty low, like $2k. If you go this route, you can do venmo, checks made out to cash, cash, whatever.
If she’s giving full time childcare for a summer, you’re going to be over the threshold, legally you are supposed to pay taxes as a household employer. Any of the nanny tax services are fine. Note that if you offer, say, $25/hr, you will end up paying more like $27/hr because of taxes. And note that she will net like $22/hr - she just needs to be aware. The second question is are you planning on claiming the childcare payments for tax credit on your taxes? If you are, you’ll need her SSN so best to do it legally via a nanny tax service. I hate employers who try to take the best of both worlds - pay under the table but then claim the tax credit, thereby throwing the nanny under the bus (by reporting her income to the IRS). Many, many, many people pay their childcare workers under the table. You’re not alone if you do. She may prefer it, since she nets more under the table. The flip side is that she’s not showing earned income, which is important for things like social security. I am a tax person so I would not do it, and I’m not encouraging you to do it, but it’s something A LOT of people do, especially for temporary summer gigs. |
Anonymous
Been one for 15+ years with no issues but thanks. I myself am paid on the books as a legal household employee but if the OP is just looking for Summer care and decides not to go on the books, Zelle works better. If she wants to have taxes taken out, that's great and would be beneficial for the nanny a well. Just responding to her question. |
Anonymous
| If just for the summer I’d prob do cash. |
Anonymous
It doesn’t matter if she’s temporary. What matters is if you’re paying her $2,700 or more in 2024: https://www.irs.gov/taxtopics/tc756#:~:text=If%20you%20pay%20cash%20wages,prefer%20to%20pay%20your%20employee's |
Anonymous
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I think if she uses Venmo she will have to report the income on a 1099 if it exceeds a certain amount.
If this is just a temporary, Summer babysitting gig it would be easier for both parties to just pay in cash or write a personal check. |