Managing your Home Employees Payroll and Taxes
Did you know that if you have a household employee, in order to do things legitimately, you have to have a payroll system in place to pay tax obligations if you pay your employee more than $2,400 a year (as of 2022.) Having a payroll company do it for you, however, can add on thousands to your costs. But with a little elbow grease and patience, you can actually do this yourself with DIY payroll management software. And that is exactly what Nannypay is – a secure and cost-effective payroll software for calculating taxes for your household employees. If you’re asking yourself if Nannypay is worth it, read below to find out for yourself!
3 Reasons why Nannypay is Worth the $199.95/year
Bottom line – fulfilling your tax obligations is the law
Anyone who has a household employee and pays them over $2,100 a year has a legal obligation to pay taxes on that employment. It’s the law, bottom line. While some may choose to do things “under the table”, know that doing so sets you up for significant financial and legal risks. The IRS does not view a nanny, or any household employee for that matter, as an independent contractor, even if you try to call them one. And should you and an employee choose to part ways, they’ll likely head to an unemployment office where any “under the table” agreement you had with them will be exposed. Wouldn’t you rather have peace of mind?
It can save you thousands of dollars over the course of your employee’s tenure
Some will shy away from doing things legitimately because of the costs they can incur for doing so and this can be quite the challenge. An average household payroll company can cost close to $5,000 over five years, which on average is how long a family generally has in-home childcare. That figure represents a big expense to tack-on to your household budget.
But did you know if you opt to DIY (do it yourself) and are willing to spend the time setting it up – meaning doing a little research and filling in the numbers, figures and facts at the onset – then you can save yourself thousands of dollars? And who doesn’t want to do that? Especially as a new year starts!
And after the initial software setup time, the maintenance is minimal and you can rest assure you are doing things the right way.
It’s easy to use
NannyPay is DIY payroll software, and although we do not do it for you, we are always here to help. In fact, NannyPay was designed by household employers for household employers, and includes an extensive guide to help you understand and make the process of paying household employees and taxes easier and at a lower cost to you.
By using NannyPay, you can also be assured that you will be up-to-date and compliant with the “Nanny Tax” laws, as the low annual subscription cost provides you for free all tax table updates throughout the year.
No hidden fees. Schedule H and Forms W-2 and W-3 are all included!
Also included in NannyPay’s low yearly subscription fee is the ability to generate at year end the IRS forms you will need to complete your tax obligations for that calendar year. Most payroll services will charge you a hefty additional fee to prepare those required forms, but NannyPay will generate a Schedule H and Forms W-2/W-3 from the plain paper in your printer at no additional cost.
Dealing with employment tax obligations is never fun, but it’s a fact of life for families that employ an in-home nanny. NannyPay is the perfect solution for families that are willing to invest a little time up front to save thousands of dollars over the long term. Download a free 30-day trial today (no credit card required).