I’m discovering an alternative reality. Every nanny I talk to asks me if I want to pay honestly or under the table. It’s like I’m back in Ukraine.
Under the Table
Opinions, art, debate
Opinions, art, debate
I’m discovering an alternative reality. Every nanny I talk to asks me if I want to pay honestly or under the table. It’s like I’m back in Ukraine.
Clarissa's Blog 
That’s odd. I know one person who is still paid under the table for festival work, but I think that’s mostly because her boss can’t guarantee his employees are paid unless things actually sell. Which is illegal because of minimum wage laws, so he gets around it by paying under the table. He does it by hour, so then everything is approximately proportional. And she gets paid quite well. She’s actually annoyed that on average she’d be getting less per hour for work in the field she’s got a degree in, especially since she’d also be accountable for taxes.
Nanny work should always be legitimate, though. It’s not like you’re paying a teenager to babysit for a night.
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It turns out there is an over 15% tax that nannies pay and they are trying to avoid it.
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Is there a specific nanny tax or is it due to the fact that they’d be filing as independent contractors (1099)? Federal self employment tax is 15.3%. If they’re filing that way, you want to make sure you can’t be classified as an employer by the state or the federal government because you’ll owe back taxes (employees pay half of FICA and employers pay half). It’s possible you can deduct the portion of what an employer pays for FICA off of your tax return, but talk to a professional.
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Not only do the nannies have to pay a huge tax, the employer also has to jump a thousand hoops come tax season. Most people prefer to avoid it, if they can.
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Now this REALLY feels like Ukraine.
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Then there is Worker’s Comp to pay, in case your employee gets injured on the job.
When our son was a preschooler, we hired college students to tutor him using a special curriculum developed just for him by an autism consultant. We hired them on the books, which meant we — well, my husband, but he finds tax forms entertaining, like others might find crossword puzzles — had many forms to fill out throughout the year.
The Worker’s Comp certificate hung on the refrigerator. They still send us mail, asking us to renew our account. My husband can not convince this state bureau that we have essentially gone out of business and have no current employees to insure against physical harm.
The consultant was self-employed and handled her own taxes and insurance. Thankfully.
I suppose all this is why people hire nannies through agencies, so that the agency does all the paperwork. But then they take a cut off the top and the nanny makes much less. Plus I would guess there is not an agency anywhere near you.
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Barbara’s right that it would be much simpler for you from a paperwork/tax standpoint to just hire your nanny through an agency. That way, the nanny isn’t your employee from a legal standpoint, and your only contract is with the nanny’s agency.
Also, if the nanny is unsatisfactory to you for whatever reason, you can easily have her replaced with a single phone call to the agency.
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This is a very tiny town. There are no agencies. And no transportation comes here from ST LOUIS for reasons I explained.
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My comment just disappeared. Boo hiss.
Short version: don’t forget about opening a workers comp account if you are paying your nanny on the books.
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And now my first comment came back.
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If a prospective nanny indicates that she’ll accept payment in heroin in lieu of cash, you should probably go with someone else.
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Well, I have a huge supple of oxycodone which is almost the same thing. Maybe I can pay in pills.
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