Movie nannies might work for a spoonful of sugar, and hugs and kisses, but in the real world nannies – no matter how loving and attentive they are – need to get paid a salary. When you’re ready to hire a nanny, you can go through the most rigorous background checks, confirm references, interview extensively and hire the caregiver of your dreams – and still find yourself in the middle of a nanny nightmare if you run afoul of tax laws.
“Like most parents, my first thoughts when hiring a nanny were the safety of my children and whether or not the nanny would be a good fit for my family and those things are certainly critical,” says Lori Bolas, SurePayroll director of communications. “Unfortunately, many parents either don’t know about or can get overwhelmed by the regulations that apply to ensure that their nanny’s payroll gets handled correctly, on time and in compliance with state and federal laws.”
Fortunately, online payroll services can help take the confusion out of paying your nanny, and ensure he or she gets paid on time and according to the law. Although nanny-hiring goes on year round, many more families may undertake the task as the school year gets started. SurePayroll offers some tips for hiring and paying a nanny:
* Make a list of nanny must-haves, such as schedule availability, disciplinary practices, experience with multiple kids, etc. Next, create a list of preferences that are negotiable. Setting your priorities before you begin looking for a nanny will help you make the right decision.
* Involve others, including people whose referrals you trust, such as family members, friends, teachers and co-workers. Ask them for help in finding candidates, and don’t forget to involve your kids. Give them a few minutes to meet each nanny candidate during the interview; after all, they’ll be the ones most affected by your choice.
* Remember, you’re entering a business relationship – albeit one of the most important ones in your life. Keep things professional during the interview and be sure to ask all the tough questions about topics that are important to your family.
* Don’t overlook online resources and professional organizations. Selection services like SitterCity can help you identify and screen appropriate candidates, and the International Nanny Association provides information, advice and a directory on its website. Be sure to use background checks, which can easily be done online, check multiple references and personally interview every candidate at least once before making a final decision.
* Discuss wages and base your offer on the nanny’s level of experience and what other nannies in your area are getting. Federal law requires nannies must get at least minimum wage, and they may be entitled to overtime.
* Prepare paperwork to ensure you can avoid tax penalties. You’ll need a 1040-ES, a signature-ready Schedule H, the annual 1040 and a W-2. If you pay a seasonal nanny more than $ 1,000 per quarter or $ 1,800 per year, you’ll probably need to pay the “Nanny Tax,” which includes Social Security, Medicare and federal unemployment tax (FUTA).
* Set up payroll for your nanny, and plan to pay him or her by either direct deposit or check. You’ll need to make provisions to pay Social Security, Medicare, FUTA and other payroll taxes, including any state or local taxes that may apply. Track tax deductions, medical benefits and other insurance. Remember, mistakes can cost you: failing to pay the IRS nanny taxes can lead to back taxes, penalties, interest and fines of up to $ 25,000.
An online payroll provider like SurePayroll can help you stay on the right side of the law by managing the pay, tax and filing tasks for your nanny. Log on to www.surepayroll.com to learn more.
“Your nanny will be one of the most important people in your family’s lives,” Bolas notes. “It’s important to start off on the right foot with good communication and ensuring payroll tasks go smoothly.”