Pay nanny tax or hire more people?
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Anonymous
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Our 4 year old won’t have a spot to return to daycare until August or Sept. We’ve been juggling but reached the point where we need help.
We have found a babysitter who is available 3 mornings a week and weekends. So far we have hired her for 5 hours a week (9-noon one day, and 10-noon another). We could go up to 7 hours a week and stay below the threshold for paying taxes. My husband thinks just paying taxes and hiring her more freely (all 3 mornings and sometimes on weekends) is the way to go. I think the taxes look complicated - I’d be willing to do it for a full time employee but for someone helping us for up to 3 mornings a week during the summer it seems like a lot of work. My solution is to find one (or two) more sitters. What would you do? Also, is the person we already hired going to bail if we want to withhold taxes? what’s the best way to have this conversation? The person we’ve hired works for another family 4 hours a day but I don’t know if it’s under the table or if they’re paying taxes too. |
Anonymous
| Why would you need a weekend nanny? |
Anonymous
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Uhhh the threshold for taxes in 2021 is $2,300. What you’re doing is probably already illegal because you’re either paying her way way less than minimum wage or you’re going to reach that threshold.
Just pay taxes. |
Anonymous
Sorry reading fail. 5 hours a week you might stay under the 2300$ threshold. Still, I’d just pay taxes. It’s really not hard and that way you’re not juggling a bunch of nanny schedules. If she refuses to pay taxes, don’t hire her for more hours. The liability is still on you in that scenario. |
Anonymous
We don’t have enough information to know whether this unicorn willing to work just 5 hours consistently is worth it. However, the taxes are easy, and you can use an nanny calculator to do your calculations for free. She would reasonably expect you to foot the bill for what you should have already withheld for fica, since you have to remit that, not her. You’ll need to figure out how much back fica (her share and yours, total 13%), and that would be on you. Then you’d be responsible for withholding her portion of fica going forward (7.5%), and doing the employer match, but I’m not sure if you’re actually required to withhold her state and federal taxes. I know that (prior to Trump), an employer of under 25 employees could choose to withhold and remit state and federal taxes for their employees, but it was a choice. |
Anonymous
| There are services which will take care of the book keeping for you. |
Anonymous
| Are you feds? If not, just hire her for more hours. |
Anonymous
| I've done the taxes myself before and they are a pain but not hard - certainly no harder than trying to juggle the schedules and availability and reliability of 3 sitters vs. 1. |
Anonymous
| Op here. Thanks all. I’d looked into services but the first I saw was $45 / month which felt like a lot for someone who isn’t full time. But it sounds like taxes are the way to go. In terms of withholding taxes for hours worked so far, she’s worked 6 hours for us so far so we’re just at the start of this arrangement. And while we don’t need a nanny on weekends in terms of work, my understanding is anytime we paid her it would count toward limits. Because we haven’t had any other babysitters since Feb 2020, right now if we want a hand on weekends or a date night she’s our best option. In fact, she’s only watched our younger daughter for 3 hours so far (one day this week) even though that’s who we hired her to watch. My older daughter new her (she was a counselor at a camp she attended) and adored her. She was jealous that the sitter would be watching her little sister, so I hired the sitter to spend some time with my older daughter over the weekend. |
Anonymous
| Your DH has the right idea. I would pay her on the books and utlilize her as much as possible. We don’t have family locally so we used our trusted sitter to cover us for date nights, family emergencies, doctor appointments and to take the occasional weekend trip away from the kids. |
Anonymous
| Use poppinspayroll.com. They're the cheapest, and it's super easy. Worth the monthly fee. I certainly wouldn't try and figure it out myself on that short of a timeline. |
Anonymous
| If I was only hiring someone PT til the end of the summer I would just lay cash and not do taxes. We have someone know who comes for 3 hours 6 times a month. I just pay cash. She’s only doing it until the end of August. |
Anonymous
| Uh, I'm a nanny and wouldn't even bother with taxes with this short term less than 10 hours a week position. I do insist on being employed as a legal household employee with my current family, as I'm with them 30 hours a week, not on a short term basis. |
Anonymous
It’s the law so OP needs to bother. |
Anonymous
OP will be fine. No one's coming after her for two months hiring someone for 7 hours a week. Chill. |