Sponsored by The PayrollNanny
Congratulations! You are an employer!
Having a nanny in your home isn’t something that should be taken lightly, you are an employer and at tax time, it is imperative that Canadians pay the proper taxes for employing a nanny. Many people miss the serious implications of hiring someone to work in their home. That means an array of federal and provincial income taxes, Canada Pension Plan, Employment Insurance, and Workplace Safety and Insurance Board premiums must be paid on the employee’s behalf.
As an Employer you have obligations under federal and provincial law to:
– Register with Canada Revenue Agency and follow its rules
– Get an employer number
– Deduct and send required payroll deductions to Canada Revenue Agency (CRA)
– comply with the Employee Standards Act
This also means, you need to keep up with minimum wage, room & board maximums or taxable benefits, Workplace Compensation Board premium rates, vacation, and of course tax changes.
If your nanny is a live in, room and board is a taxable benefit. Some people believe that they don¹t need to include this as part of their nanny’s payroll taxes. But the CRA says that if your employee is given free room & board, then the employee is receiving a taxable benefit and the fair market value of the meals and accommodation must be added to their pay.
Regardless of what deal is struck between the family and the nanny, live in or live out, all taxes still have to be paid. The family will not be able to claim child-care costs without proper documentation. Some parents may be able to claim yearly child-care costs as a deduction, which helps offset the salary costs. By choosing to forgo claiming the deduction, this could be very costly – up to 46.41% of the amount of the child-care deduction, so for two kids under 6 the cost of the lost child care deduction could be as high as $6,500.
Employers are responsible for treating their nanny with respect, this means to pay proper wages and all relevant taxes. It’s the law. So, there is plenty to do to take that precious time away from your family even when you have a nanny. Paying your nanny can be a daunting task if you have never done payroll before.
Professional services available like The Payroll Nanny can help ease the confusion. Today, not filing appropriately for a caregiver and run penalties of 10-20 % of the total required amount. For just $65 a month, as a mom, you get more than just peace of mind.
What are some of the benefits of signing on with this service?
Direct Deposit: You will have no more cheques to write and or paperwork to handle. Through pre-authorized direct debit, they will electronically transfer payment from your bank account to your nanny’s account on the agreed pay period and prepare pay slips.
“The one thing that sets our service apart is that we really keep things simple,” said Todd Trowbridge, Co-Founder of The Payroll Nanny. “Employers don’t have to worry writing cheques or getting cash out to pay their Nanny each pay period. We set up a direct debit that withdraws the Nanny’s pay and our fee in one transaction. The funds are deposited into the Nanny’s account and we provide the nanny with online access to their pay stub. At tax time, they also get online access to their T4.”
Confidence: The Payroll Nanny is owned and operated by a team of Chartered Accountants. They will accurately calculate and remit the required CPP, EI, Federal/Provincial taxes, and WSIB registration and premiums submission on time ensuring that late penalties are avoided and that all regulations and filings are adhered to and meet the appropriate guidelines.
Reliability: You can be assured that your Nanny will be paid on time and you will never have to worry about paying penalties for remitting your government remittances late.
Trust: All of the information you provide is considered sensitive and confidential. We are committed to complying with the Personal Information Protection and Electronic Documents Act (PIPEDA) of Canada.
Cost & Time Savings: By subscribing to The Payroll Nanny service, you avoid being hit with hidden costs at tax time and you save valuable time throughout the year.
“Employers complete some basic information through our website. There would be an initial sign up with forms after we follow up. There would also be a pre-authorized debit agreement and we would send out a WSIB registration to be completed—all of this is included in the $65 fee. If employers haven’t remitted the taxes for their nannies in previous years, we may be able to help them submit without any penalties through the CRA’s voluntary disclosure program.”
Sign up Today! www.thepayrollnanny.ca
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