![]() ![]() Some nannies operate as a sole trader/business, invoicing clients who use their services. When a family engages a nanny by paying cash, they’re also not likely to be covered by Worker’s Compensation – something that is risky and could be an issue if your nanny is injured at work. This happens if it is determined later that they should have been the nanny’s employer. Parents who pay a nanny in cash without meeting certain obligations can be required to back pay taxes, penalties, Super and/or other costs. So they’re not likely to face any serious repercussions… but you as the parent might. When they receive a cash payment, the nanny can still meet their tax obligations by declaring it on their tax return. While this is ok for occasional casual work, it’s not the best option for ongoing arrangements. Some families choose to pay a nanny in cash (or bank transfer of cash), just like they would for a babysitter. Employ your Nanny with the support of a Payroll Service?.Employ your nanny yourself or through your own business?.Your new installation will then populate with all your payroll data.Choose the backup file, “nannypay2.esc” that you moved to the new system in step 1. You will then be presented with an open file dialog.Choose the last option: “Import employer and employee data from a NannyPay2 database” and click the “Next” button. When you run NannyPay2 for the first time on your new system, the Employer Setup Wizard appears.Download and install the most recent version of NannyPay2 from our web site at.These files have the same names whether you are using a Mac or Windows. Move your backup files (“nannypay2.esc,” “data.esc,” and “ttl.esc”) to a location on your new hard drive or new system. ![]() The following instructions assume you still have access to your NannyPay2 backups. However, if you have access to hard copies of paystubs, you could try recalculating each payroll transaction using a new installation of NannyPay2. If you have external backups of your old hard drive, you should be able to recover your payroll data, If you did not maintain backups, unfortunately, you will not be able to recover your data. Even if you and your nanny do part on good terms, many times the first place a recently unemployed nanny will turn is to the unemployment office, to file for benefits, at which point your “under the table” arrangement is likely to be exposed. Remember, although you may think you have a good relationship with your nanny and that your employee will never “turn you in”, realize that this employment relationship will eventually end, and perhaps not on good terms. Moreover, if you are employed by the government or in a professional capacity, your avoidance of your household employment tax obligations could put your job or career in jeopardy. ![]() IRS audit rates continue to increase, particularly for higher income taxpayers, so it is the family – not the nanny – that is assuming most of the financial risk of such an employment relationship. ![]() In the event of an audit, you, as the household employer, will be ultimately responsible for all FICA and other employment taxes that are owed to the government on the nanny’s wages, even if you did not withhold the nanny’s share because you had been paying her “under the table”. Although household employment tax laws certainly add an additional expense to your childcare budget, you really can’t afford not to comply with the law.Īlthough some nannies may even ask to be paid “under the table”, a family that agrees to such an arrangement is taking significant legal and financial risks. ![]()
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