Op Here:
So i emailed MB this morning saying that I read up on paying taxes and how much i needed to start putting aside for tax purposes and everything I read was that a nanny is considered an employee not a contracted worker. I also stated concerns about the slight pay cut and that if I was to take a paycut and be needing to put $$ aside for taxes I wouldnt be able to have summer vacations and christmas break upaid. (as it would lose $$) I hope they dont see me as being gready.

I sent this email this morning and I still havent heard anything back. However I have seen in a facebook group we are both in that she posted a questions to other moms about how they pay nanny taxes. And I got a text message from a friend who is in a different facebook group with her that she posted the same question but also posted if anyone had space available for daycare.

Honestly my heart is broken. I have given so much of my life, commitment, money (paying for icecream, dollar store colouring, play place, birthday & christmas gifts) time (HOURS and HOURS probably in the hundreds of un scheduled last minute overtime.- and as in last minute i mean 4:59 when im off at 5 to stay an extra 2 hours)
I feel like I have been so loyal and i have heard time and time again that they are happy with my performance and the kids adore me and talk about me all weekend,

Ive heard tones of times that Im part of the family... But then you realize you really are just a nanny to them.

I hope i hear back from them before my next shift... And i really hope it isnt to tell me they are choosing daycare or I will be crushed

Canadian Nanny - same situation with my last nanny family. I declared my income as other employment income, CRA reviewed it and in the end nanny fam had to pay EI and CPP - both their portion and mine because it had been their responsibility and by law they were required to deduct and file properly. The penalty can be fines as well as paying both parties amounts. You would still always be responsible for your own taxes.

I believe they are also be required to register for workers comp.

I explained the tax situation to my current family and the risks in not filing properly and provided CRA documentation (probably the same pages you were reading) to explain that they would be my employers and I could not be self-employed. CRA has some great pages explaining the responsibilities of employers. Service Canada is another good resource for ensuring you are meeting Canadian employment standards as far as time off and stats. At 3-days/week, you may not qualify, but you should be able to review that on on of those sites.

Good luck.

Once again thank you.
As an MB do you have any suggestions on how to approach this topic in a respectful way? I feel that i need to work this out asap. I will want to bring up paid vacation regardless, at least on their side as I wont be able to take another summer and christmas break unpaid. Is there anything that you would recommend to include in this conversation?

Anonymous wrote:to the mb from canada. thank you so much! this was very helpful. I will be contacting them this weekend. Im also interviewing with a few other families so I have a back up plan.
I will be putting together something to send to my current MB. I hope we can work something out!
Is it cheaper for them if i file as self employed but more expensive for me? Im wondering if they are aware of that

Hi - You're welcome! Yes, it would be cheaper for them if you file as self employed versus as an employee as they would not have to pay the employer's share of EI and CPP, although it is not much anyway, at a salary for $500 gross a week the employer's share is $35 per week. However, if you are self employed you might have to charge them 13% sales tax (under a certain amount you don't have to charge it, and you might fall under that limit). And obviously it would be cheaper for them if you file as self employed versus being paid under the table as they can claim the tax break. I think that for you to file as self employed would not be more expensive for you versus being paid under the table but I'm not sure. Note that if you are self employed you would not be able to access EI if you were laid off, would not have CPP entitlement, etc. Also you would not be entitled to any of the benefits of being an employee such as paid vacation, paid public holidays etc. However, it would not be legal for you file as self employed, under employment law you are an employee if you care for children in their home, you cannot be self employed/a contractor in this situation. Being paid as an employee would result in less take home pay but you would have the protection and benefits of an employee under the law.

to the mb from canada. thank you so much! this was very helpful. I will be contacting them this weekend. Im also interviewing with a few other families so I have a back up plan.
I will be putting together something to send to my current MB. I hope we can work something out!
Is it cheaper for them if i file as self employed but more expensive for me? Im wondering if they are aware of that

Put your foot down though. Tell them you're uncomfortable and show them the reasons why you're considered employed not self-employed. but it does come down to finding work elsewhere if they don't want to do it the right way. If you're set on staying regardless then you might have to suck it up.

MB from Canada here again, I also want to say that I understand that you love this family and want to keep this job, so it is a challenging situation for you. But if you think they might consider letting you go just because you stuck up for yourself and asked for fair treatment, then this would imply that they might not be as loyal to you as you are to them. To handle it diplomatically, I think you should say what you've said here, that you love the kids and feel like you have a great relationship with the family and hope that they can find a way to achieve what they want in terms of getting the tax deduction and the hours they need from you without reducing your net take-home pay, and point out that if they are to legalise the arrangement they will under the law need to treat you as an employee in other respects too, i.e. paid public holidays, vacation pay, paying you even if they don't need you when they take holidays, etc. Perhaps say that you will be as flexible in any other respects as you possibly can be in order to make this arrangement continue to work for both parties.

By the way, while you say you have a contract with them, it is not legally binding as they are currently employing you illegally. Any contract you agree to once you are legal must abide with labour regulations in terms of number of hours worked, paid vacation etc.

I am a MB in Canada. If they want to claim childcare costs on their taxes, i.e. turn this into a legal arrangement, then they must register with Canada Revenue as an employer and deduct CPP, EI and taxes for your pay cheque as well as paying their employer's contribution. It is not difficult to figure this out, they can calculate the deductions using the government's Payroll Deductions Online Calculator (google it). They need to send a cheque in once a month, though I think it might even be possible to do it quarterly. They will have to issue you a T4 every year - again, it is not a difficult form to complete. If you are a low income earner, you may find when you do your tax return that you get a lot of that money that was deducted back, so the hit might not be so bad. To be clear, you are exactly right that you cannot be a nanny in someone else's home as a self employed person/contractor, they *must* be your employer. If you are salaried, you should look into payment for public holidays, you should look at something like the publicc holiday pay calculator, as you would probably be entitled. https://www.labour.gov.on.ca/english/es/tools/php_calc.php. Also, in Ontario for example, the government says employees are entitled to two weeks (ten days) of vacation time after each 12-month vacation entitlement year, though some employers let their employees take this before the 12 month period ends. I don't think paid sick days are mandatory but I do think that if you are available to work when they go on holiday that legally they have to pay you, otherwise they have ceased to employ you or maybe technically have laid you off, which triggers a whole bunch of paperwork.

On the employer's side, they get to claim this as a deduction so there will be a clear financial benefit for them. You might want to point out that you are aware that they will be saving money via this arrangement, whereas you are concerned that it will result in you losing money. I'm not completely clear why they are trying to reduce your hourly rate by $1. It sounds like they want more hours at a lower hourly rate. That's crazy. Why should you work more for less money??? On top of that, they will be deducting tax, EI and CPP from your pay, so net take-home pay will be even lower.

To be frank, they are either naive or they are jerks. It sounds like they are not treating you fairly in this situation. You need to be clear on your rights and their obligations, and present all of this to them, preferably with print-outs of the relevant web pages to illustrate to them exactly what is required and what the financial implications are for both parties (they should do this but if you really want to keep this job it sounds like you will have to).

Good luck!

You're absolutely right, you work out of their home and use their diapers etc. so you are not self employed. However, most families do it this way, it is more difficult to find a job where families are willing to do things the right way because it costs them more. If its important to you and you want a job with paid vacation time etc. start looking for another job, you can't change them.

I am so sorry they are taking advantage of you like that. You care about following the law, and they don't care at all. I am so sorry for you.

*I am from Canada, Im not sure if the rules are different from usa*
So my current contract is for 3 days a week at $xxxx unclaimed. My employers are have told me they will be claiming in 2014. They told me that I will claim as self employed tho when I looked it up and after reading on here, I know that they are my employers. I have brought up a payroll service but they don't want to pay for it and they also said that then they would become "employers"
They also have asked me to take on an extra day. They obviously will be paying me more for the extra day but because they pay a flat monthly rate (based on hourly wage but averaged out so I have dependable income every month) My hourly would be going down by 1 dollar. Im not super keen on this as they will be claiming and Im making around 200 less a month than i would if i was paid my current hourly wage for the hours that i work. They told me that this was the max amount they can do. They are willing to let me look into a nanny share but not in their home.
I also have no paid holidays but they do pay me for 1 week when the go on holidays but they usually go 3 weeks at a time. I get no paid time off of my choice or paid sick days

I absolutely LOVE the family and this was the first REAL nanny job i took so I was a little naive when originally negotiating 2 years ago.

I would like to negotiate paid holidays and sick days but Im not sure how to word it in a respectful way. i also feel like i need to tell them I cant afford to claim as well as take a pay cut. This is going to be my 3 year of employment and we really havent had any issues and i would love to keep it that way.
Ideally i would like to keep my job so please dont suggest quitting. The kids are like family and I would feel heart broken if I wasnt able to spend my days with them.