GLENVIEW, Illinois., July 13, 2021 / PRNewswire / – A recent poll human resources managers and ‘return-to-work decision-makers’ in several industries say most companies will adopt a home office or hybrid combination when it is time to return to the workplace, three-quarters of respondents expecting employees to spend two to three days a week in the office.
The flexibility of the post-Covid-19 hybrid workplace presents families with a childcare dilemma that many will resolve by hiring a home or home nanny. According to Jenna Shklyar, head of marketing at SurePayroll, hiring a nanny to supplement and simplify childcare also adds responsibility for household payroll and tax consequences.
âParents who hire a nanny for the summer should consider salary and tax responsibilities, like those of a small business owner. A nanny is more than a casual babysitter in the eyes of the federal government,â said Shklyar. “Home or home child care is considered a domestic worker, a classification with specific rules and requirements.”
Jamal Ayyad, Head of Product Management at SurePayroll, acknowledges that most families invest a tremendous amount of time and energy in determining qualifications, liking, personality, discipline style, and general fit with the family. He suggests that they also fully understand their obligation as a domestic employer to âavoid costly problems, penalties and finesâ and to benefit from government programs. âFamilies can save money by paying their nanny on books, in part thanks to the FSA dependent care, which is up to $ 10,500 in 2021. ”
Ayyad encourages parents to follow these tips from SurePayroll when considering hiring a summer or back-to-work nanny:
- Appropriate rate of pay. The national average salary for a nanny is around $ 26 per hour, depending on geography, number and age of children, and additional responsibilities, such as transportation to school and activities, meal preparation, tutoring and more. A nanny has the right to be paid on time and a half for overtime, and more.
- Job classification. It is essential not to classify a nanny as an independent contractor or to consider a nanny to be self-employed, and it is inappropriate to issue a Form 1099 to a nanny who has won. $ 2,300 or more in 2021.
- Failure to properly classify a domestic worker can lead to serious tax consequences, including tax evasion costs and penalties that can exceed $ 25,000.
- Online payroll system. A family employer is responsible for managing payroll, including payroll deductions; paying a nanny “under the table” is not a viable option. This is why many families choose to use a online payroll system which calculates and pays the necessary taxes and deposits the appropriate deductions for Social Security, Medicare, Unemployment and State taxes. SurePayroll Household and Nanny Payroll Service also prepares several 1040-ES returns on behalf of the household employer and provides a ready-to-sign Schedule H to attach to the client’s annual 1040 return.
- Home insurance. It is essential that household employers verify that their current home insurance policy covers property damage, personal liability and potential injury. Household employers may need to update their policy or add insurance endorsements to cover nanny services. This is all the more important as each state has different rules and requirements regarding domestic worker coverage based on residence and / or hours worked. Some states do not consider home insurance to be valid workers’ compensation coverage for domestic workers. Be sure to check with a local agent to ensure coverage compliance.
Hiring a nanny can give parents peace of mind when they return to work in the office this summer. But making a mistake in the hiring process can be costly.
For more information on payroll and taxes for domestic workers, visit SurePayroll Nanny Payroll Guide
SurePayroll, a Paychex company, has been a nationwide leading provider of online payroll services for small businesses for over 20 years. As the first software as a payroll services company, SurePayroll has become a household name in payroll, workers’ compensation, 401 (k) plans and health insurance services, all backed by a customer based service team. More recently, SurePayroll added HR services to its portfolio of solutions. By providing the added flexibility of private label and co-branded solutions, SurePayroll serves as a strategic partner to a wide range of businesses and trusted advisors, including financial institutions and accountants.
CONTACT: Karen Stoychoff Inman, 847.431.4230, [emailÂ protected]