Having the Money Talk with Your Employer

Updated

You just found your perfect job. The family’s expectations of you line up with the way you prefer to work and you get along with them. There’s only one small hiccup—you want the benefits that come with professional pay, but they’ve never paid employer taxes before and aren’t sure if they want or can afford to. So how do you go about convincing them to pay you professionally?

1. Explain the benefits of legal pay

Taxes withheld from your pay make it easier to qualify for the short-term and long-term benefits other workers enjoy—such as Social Security & Medicare benefits when you retire, unemployment insurance, access to healthcare subsidies and a verifiable employment history that’s required for obtaining loans and credit. Professional pay also protects both you and your employer if you get audited.

2. Offer resources to help

One of the main reasons families don’t pay nanny taxes is because they’re not tax and payroll experts and don’t know what to do. You can help ease their worry by sharing information with them about nanny taxes and even what specific requirements they’ll have in the state you live in. And if they’re worried about the work involved, let them know that Care.com® HomePay, provided by Breedlove can handle the entire process for them— and provide a complimentary consultation.

Families also may have concerns about the cost of paying legally. If so, they’ll probably be pleasantly surprised to learn that tax breaks can sometimes offset most, if not all, of their employer tax costs. Our Employer Budget Calculator will help them see that nanny taxes may cost less than they think.

3. Talk about what your pay should look like

Professional pay is based on “gross wages” (before taxes) rather than “net pay” (after taxes). If a family is offering you a given net pay, you can simply convert that to a gross amount using our Employee Paycheck Calculator. For example, if you’d like a “take-home” pay of $500 a week, you may ask for a gross wage of $616. (The gross wage is dependent on your income tax withholding elections). Here’s an example you can use:

Gross Wage:

$616.00

Social Security & Medicare

$47.12

Income Tax

$68.72

Total Tax Withholdings

$115.84

NET PAY

$500.16

 
* 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 adviser 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.

37 Comments

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Cherry B.

Does it means also that once the employer Withold federal and state tax, the unemployment is also covered?
May 02, 2015 at 7:27 AM
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Cherry B.

Hi. I would like to ask how much will i federal and state tax be for income of $400 a week. I live in New York. How much will be my take home pay? Thanks
May 02, 2015 at 6:49 AM
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Valerie H.

Hello! What is the cost of using the HomePay service? Please answer for both the caregiver and the employer. Thanks!
February 28, 2015 at 10:05 AM
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Tom B.

Hello Beth. Care.com does not generate W2s for employees online, but HomePay does. Ask your employer if they use HomePay to handle your payroll and taxes. If the answer is yes, your employer can download your W-2 from our site at www.myhomepay.com.
February 18, 2015 at 6:25 PM
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Tom B.

Hey Kathie. Since I don't know what state you live in, I can't determine how much of your compensation can be deducted for room & board and thus how much you're really earning per hour. Based on the hours you mentioned, you're at $8.75 per hour, which is above federal minimum wage, but also assuming you're working literally around the clock. As a live in employee, you're only required to be paid for the hours you're performing duties, so I tend to believe you're being paid for less than the 120 hours you mention. If you're concerned about your compensation, this is a conversation you should have with the family. As long as the law is being followed, it's really up to you and them as to what merits a raise.
February 18, 2015 at 12:55 PM

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