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At Nicole's Nannies we HIGHLY encourage you to pay your nanny on the books. With the help of GTM, this process can be easy for your family! Did you know that if you pay a nanny more than $2,100 in a year you are required by law to pay Social Security and Medicare?
Families are typically concerned about how much more it will cost to pay on the books, and overall it's about 15% more to pay your nanny on the books. Having a nanny is most definitely not the cheapest option, but having a nanny in your home can be one of the best opportunities for your family.
Benefits of Paying Your Nanny on the Books:
Your nanny will accumulate retirement benefits.
Your nanny will accrue Social Security, Disability and Medicare benefits.
Your nanny has a written record of a work history tied to her SSN which will help your nanny be able to buy a car, rent an apartment, or even buy a home.
Your nanny will have the opportunity to qualify for earned income credits.
Your nanny will have unemployment if you need to let her go.
If your company has a childcare flex account you can pay using pre-tax income to offset costs
You can get childcare tax credits (which will help offset the extra costs) (IRS form 2441)
You don't need to worry about penalties.
You don't risk losing anything if you get caught (which is more common than you would think!)
Nannies who request to be paid on the book are typically more serious, qualified, and will be more likely to stay long-term with your family.
For more information on payroll and how to pay your nanny legally, please visit GTM.