4 Ways to Get Your Employer to Pay You Professionally

woman with two children

Updated

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.

47 Comments

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Marlene

It happened to me that I worked for almost 11 years taking care an elderly couple. He was a very right person, but after he passed away, THE SON IN LAW started to pay me as an independent employer. He always told me that it was to much money to pay on their side.I regret myself that I did not find help at that time. On top of it, they made my life miserable even though I was still taking a complete care of the Lady of the house. With my heart broken for her I had to leave the job. Thank you for this information, it is very helpful.I won't make the same mistake from now
February 25, 2016 at 9:12 AM
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Katherine G.

It amazes me how little the parents expect you to work for. They expect more than just caring for the children, they want house cleaning done too. Not that I don't mind doing it, but doing both for $3.00 an hour because of a set rate. Your children are your most important and yet they won't pay an experienced nanny of thirty five years.
November 25, 2015 at 8:08 PM
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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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