Tag Archives: Nanny Tax

Taxable Benefits and Nannies

A taxable benefit is a perk that is provided at no cost to the nanny.  The perk is for the nanny to use for his/her personal use, on his/her personal time. Some common examples of taxable benefits that nannies’ often receive are: transit passes room and board gym memberships cell phones (proportion for personal use) […]

Tax tips for contractors/on call nannies

Paying Taxes as a Contractor. Get Organized Today!
As an on call nanny, you are considered a contractor, so rather than paying taxes throughout the year, you pay your taxes in one lump sum at tax time.
Even though tax season is behind us for this year, if you start getting organized NOW, cutting that cheque to Revenue Canada next spring, will not hurt as much.

Remember that ALL income must be declared!

Annual Nanny Reviews

If your nanny has worked with you for more than a year, it’s time to seriously consider scheduling an annual review with her. Over the course of the year, your nanny has had time to settle into her role and develop a routine to accomplish her responsibilities and meld into the daily schedule of the family. Although she may feel like a part of the family at this point in time, she is still a professional who deserves to hear input on how she is handling her job from her employer.

Nanny Year End Tax Tips

For today’s nannies, getting ready for tax time can be daunting. Sorting through a mountain of paperwork is a most unwelcome chore to anyone with work commitments and family obligations. Whether you do your taxes personally or simplify your life by using a professional accountant, you must collect, sort and organize the required documents.

The following tips will help ease the stress of tax season.

1. Locate the necessary forms and papers and store them together in a file folder or envelope. Your folder should include:

Hiring Grandma as the Nanny

Question:
I have a 1 year old daughter. I started work a month ago and I’m leaving my baby with my mom. I want to pay her $400 monthly …she didnt wanto to accept any payment but we agreed on that amount. Does my mom have to count that income for taxes? Can I claim her pay as a childcare expense? Should I hire her as a nanny? Do I have to apply for a business number?

Should You Pay Your Nanny For A Snow Day?

So, here’s the situation: a severe snow storm swoops through for two days, many of the streets are out of the question to travel on and quite a few businesses don’t even open due to the inclement weather. You and your husband, were able to get to work. Your nanny, of about three months now, called to tell you that she attempted to get to your house, to no avail – there were road closures in every direction. The streets were terrible and she would not make it to work, so you quickly call your niece, who lives down the street, and ask her to step in as the nanny for the day.

Audit Season! Are your tax receipts in order?

April 30 was the deadline to submit personal tax returns. In the months of June, July and August, Nannies on Call’s accountants tend to get calls about clients being audited for their personal tax returns – particularly with Child care expenses.

When the Canada Revenue Agency does a personal tax audit, they concentrate on Child Care expenses because child care expenses are a direct deduction from income as opposed to a tax credit (a tax credit is normally 15% of the amount). If you employed a nanny and claimed Child Care expenses, have your receipt prepared in case Canada Revenue Agency knocks on your door.

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Is your Nanny an Employee or an Independent Contractor?

Is your Nanny an Employee or an Independent Contractor?

After searching for the perfect nanny, how are you going to pay her?

In determining the nanny’s status as an employee or as an independent contractor, Canada Revenue Agency does the following tests:

Control: Are you specifying the work to be done? Are you specifying the working hours and are you reviewing the work that was done?
Tools & Equipment: Are you retaining the right of use over the tools and equipment that the nanny uses for the work? Are you supplying the necessary equipment for the nanny to use to care of the children (e.g. high chair, crib, stroller) when the nanny is at work?
Financial Risk: Are you reimbursing the nanny for costs of children activities (e.g. entrance fee for zoo, Science World or a play group)? Are you reimbursing the nanny for the costs of transportation during work time?
Integration: Do you have a continuous relationship with the nanny?

Nanny Salary – Net vs. Gross

What is Net vs. Gross?
As a household employer you are responsible for paying and withholding your nanny’s taxes.