4 Ways to Get Your Employer to Pay You Professionally

woman with two children

The call came the other day. The family you loved interviewing with and playing with their kids has asked you to be their nanny. The pay is what you wanted. But wait, are they planning to pay you professionally so you can count on benefits and protections, such as unemployment, retirement, workers' compensation, disability, etc.?

Very few families have experience as an employer, so mistakes and oversights are commonplace. You can protect your own interests by making sure your employer knows you want to be paid legally. No matter how much you love the kids, you don't want to get involved in tax evasion.

Watch this video for advice from Care.com's senior managing editor Katie Bugbee on why you should be paying taxes and how to talk to your employer about them. Then check out the tips below for more on how to convince your family to pay you legally

  1. You Are Building Your Future
    The employment taxes ensure that you'll have critical retirement benefits. Social Security and Medicare provide benefits from age 67 until death. However, each worker's benefits are based on their reported income during their working years. The more you report over the years, the more you get during retirement. Workers who allow themselves to be paid under the table will not be entitled to these vital benefits.

  2. There are Tax Breaks to Offset Costs
    Families can offset most (if not all) of the employer tax costs by taking advantage of one of two childcare tax breaks: their Flexible Spending Account and the Child Care Tax Credit. Families with two or more children can take advantage of both tax breaks. You can use a Nanny Tax Calculator to find out how much it will cost the family, and how much they could get covered. Learn more Employer Benefits to Paying Nanny Taxes ?

  3. Nannies Are Not Independent Contractors
    Some families think nannies can just fill out a 1099 at the end of the year. But this is illegal. And the IRS and Department of Labor are trying to crack down on what they call "worker misclassification." This rule is to protect the nannies, housekeepers and other household employees because misclassification hurts the worker. How? Independent Contractors are not entitled to Unemployment Insurance and they have to pay both the employer and employee portions of the FICA taxes (Social Security and Medicare) -- which adds another 7.65 percent to the worker's tax rate.

  4. You May Need Unemployment Benefits One Day
    Say one day, after the kids you nanny for move on to elementary school, the family has to let you go. They are so sad, but they just don't need you to nanny anymore. Then, say, it takes a while to find another job. And you need to pay your bills. You might need to file for unemployment. If you and your employers haven't been paying taxes, the unemployment office will not give you benefits to replace your income. Additionally, the tax agencies will investigate the family you've been working for. This is one of the many ways families get in trouble for tax evasion.

For more information about legal pay and how it benefits you and your employer, check out Care.com HomePay, managed by Breedlove. You can find a wealth of information, tools and resources that can make legal pay easier and less expensive for you and your family.

Your Next Steps:

* The tax information contained in this article should not be used for any actual nanny relationship without the advice and guidance of a professional tax advisor who is familiar with all the relevant facts. The information contained herein is general in nature and is not intended as legal, tax or investment advice. Furthermore, the information contained herein may not be applicable to or suitable for your specific circumstances and may require consideration of other matters.

For more tips and advice, check out these Nanny Tax Articles.


Join the conversation

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Silvana C.

Hi, thank you for the information about the payment. This is my first time in the Care.com, I learn with us how are the rules. Thank you again, and Have a good day.
August 17, 2015 at 12:24 PM
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Laura G.

How would I know how someone from Texas would get in touch with me and can't get on the phone because they are deaf/????
April 13, 2015 at 3:09 PM
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Soumana N.

I am a first time nanny to be. I am thankful for this webpage. I gain better understanding of the affairs between a w2form and 1099form, nanny duties etc...thank you you all for sharing.
February 07, 2015 at 1:20 AM
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Julie Y.

Thank you all for meeting my needs for learning practical and useful information about these topics and concerns as I begin.
January 18, 2015 at 10:05 PM
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Vanessa W.

Very helpful information thanks alot
November 12, 2014 at 6:22 PM
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Karol G.

It amazes me how little some people really think of their nanny who spends so much time with their children in their homes. This is a service with love and care we provide that can not be replaced in a day care setting. The big picture of care in your home with optimal care verses day care and unsafe lifestyles just is unreal to me. Do right by your nanny people as they spend every moment keeping your most valuable treasures safe and loved and happy!
November 08, 2014 at 1:49 PM
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Care.com Member Care

Hello Brenda, we have an article with plentiful information in regards to a salary for live in nannies. I hope this proves helpful. Good luck on the job search! http://www.care.com/child-care-what-does-a-live-in-nanny-cost-p1017-q30359222.html
May 01, 2014 at 4:27 PM
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Stephanie B.

Hi Brooke! Your classification as an employee of each family you provide services for or a self-employed business all comes down to who controls the working relationship. Generally, if the family tells you what time to be over to their home, what duties you'll perform, when you'll perform those duties and provides all the materials necessary for you to perform the work, you would be considered the family's employee. If the opposite is true, you're probably running a business. The IRS has a helpful page of information that I think will aid you in figuring out how you should be treated. (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee)
April 30, 2014 at 4:56 PM
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Brooke K.

What about dog walking/care/sitting services? If I am providing services for several different clients, does that count as self-employment?
April 30, 2014 at 12:50 PM
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Stephanie B.

Hi Nora! I'm so sorry to hear you were working a job that paid under minimum wage and that you've been unable to receive the wages for your last few days of work. What I am happy to hear is that you've moved on to a better situation and I sincerely hope the family you're working for now is treating you in a more professional manner.
April 28, 2014 at 10:32 AM
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Nora S.

I was working under the table at $60 a day for 10 hours 3-4 days out of the week. Just recently I got put on payroll and because I left the family for a better paid job. The family doesn't want to pay me my last 3 days that I worked for them. They told me I wasn't going to get paid because he paid payroll fees and he was going to use my money as part of those fees that he had paid. I never Received my money.
April 25, 2014 at 10:38 PM
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Stephanie B.

Hi Shirley! You don't need to fill out a W-9 as part of your work agreement. That form is used to capture an Employer Identification Number and you're not a business - you're an employee of the family. You should really share the tips in this article with the family and start having your employment handled in the proper manner. Cash always seems fine in the short-term, but it's not a good long-term solution for you or the family. There is a list of things the family needs to do to comply with household employment laws in Arizona on the HomePay website and I would suggest they take a look and get their tax situation straightened out now so they work isn't overwhelming later in the year. (http://www.breedlove.com/Answers/State-Nanny-Tax/AZ/Overview)
April 23, 2014 at 10:32 AM
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Brenda T.

How much should a live-in nanny make working 12 hours a day? I'm very close to LA in CA
April 23, 2014 at 9:46 AM
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Shirley J.

Hi, I have been employed as a nanny in Feb. 11 of 2013 to a family in Dallas. I was paid in Cash for the whole year that I worked for them. It was my first job and needing some money, I accepted to be paid in Cash. I am again employed as a caregiver here in Arizona to a private care home and same thing, I'm being paid in Cash but the only difference is that they asked me to sign a w-9 Income tax return. Can you please help me?
April 22, 2014 at 5:00 PM
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Stephanie B.

Hi Tiffany! Great question and the answer lies in the example you actually provided. A 1099 is supposed to be used for those that are truly self-employed and run their own business. A nanny, full-time babysitter or other household employee does not fit this classification and therefore cannot - by law - file their taxes this way. The IRS has ruled definitively that these employees must file taxes using a W-2. Families that are caught via audit can potentially face tax evasion charges due to worker misclassification.
March 12, 2014 at 12:25 PM
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Tiffany H.

What is the problem with demanding higher pay and requesting a 1099 be issued? I'm not sure why this would be illegal, as stated in the article above. My family has been self employed in a different service industry for years and this is the way we file our taxes yearly.
March 11, 2014 at 9:40 AM
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Antoinette G.

I recently just finished a job and did not know tha t i was to pay taxes or that it was illegal to be paid the way i was. so tyhank you for the information of the tax laws that we should be paying and how it helps me to avoid fraud.
January 08, 2014 at 1:32 PM
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Rosita P.

This is true and it happened to me, if I did not insist to be paid legally then I would not have received unemployment benefit when my I lost my job when my client passed away. It was not easy to convince my employer to pay me through payroll, it took a lot of discussion.
October 10, 2013 at 5:06 PM
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Rebecca R.

Linda, Most people hire nannies because they do not want to deal with a daycare, which tends to be very expensive, and they figure if the person is comig to their home, their child will get more one on one care, and because there are so many of us out there, they wil usually find one that will work for signifigantly less money than what the day care center would cost. PLUS, daycare centers DO NOT do laundry, cook meals, and do "light housekeeping" which is a fancy way of saying clean up after my family so that we don't have to. For all we do, we are amongst the most underpaid employees in the country. It's very sad.
August 20, 2013 at 8:15 PM
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Linda S.

I think that most people hire nannies these days because both parents are working and there are not enough hours in their day. When they think of adding the hassle of dealing with taxes, they shut down. The whole tax process is so complicated, and they just don't have the time. If the IRS could make it simple for people to understand, step 1, step 2, etc., maybe more people would be willing to pay their share of the taxes and file the appropriate forms. Also if they are shown (as this site does) the specific tax advantage for themselves as well as the nanny, they might be induced to try to set it up legally.
August 04, 2013 at 12:34 AM

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