An experienced nanny you can trust isn’t easy to find, and when you do find one you like, it’s critical that you maintain that positive relationship with your nanny without diminishing the importance of the childcare itself. This can be a tricky balancing act. The good news is that most nannies have the skill and experience to reinforce these boundaries and positive relationship along the way. Here’s one big thing you can do, as an employer, to get started on the right foot: Make sure you can offer a dependable paycheck and transparent nanny payroll information.
Advanced Micro Solutions (AMS) is your answer for affordable software support that can demystify this process, automate your payroll calculations, and greatly simplify your end-of-year form filings.
Getting Started
If this is your first time managing nanny payroll, you’ll want to know this Household Employer’s Checklist published by the IRS. Here’s a quick a step-by-step guide of the things you’ll want to be doing to meet your payroll responsibilities as a household worker employer.
Nanny Hiring Checklist
- Verify the person can legally work in the U.S. (Form I-9)
- Determine if you need to withhold federal and/or state payroll taxes.
Nanny Pay Checklist
- Withhold payroll taxes and/or decide if you will pay the nanny’s portion of the payroll taxes.
- Withhold federal and/or state income tax.
- Keep records. (AMS Payroll can do this for you.)
- Plan to make scheduled tax payments.
Industry Standards and Negotiating Nanny Pay
We recommend researching the local pay standards, but here’s a quick and informal guide to average wages and salaries for nannies. There’s no right or wrong answer to salary compensation, but feeling confident in your nanny payroll is a great way to build leeway into the negotiation. One popular way many household employers sweeten the pot is by offering to pay the entire balance of the payroll taxes. Typically, employees contribute half (7.65%) the amount of the federally mandated FICA taxes (15.3% of the total wages). In addition to increasing the nanny’s take-home pay, it streamlines the tax burden. That said, you’ll still have to track and withhold the employee’s income taxes, or else the nanny may be blindsided by their end-of-year tax bill.
Nanny Payroll Software from AMS
It’s easy to verify your payroll information and automatically calculate payroll taxes with our AMS Payroll. Like all of our solutions, our payroll software is built on our foundational platform, the W2/1099 Forms Filer. This platform delivers intuitive operation within a menu-driven interface. Already have a payroll solution in place? You can use our Forms Filer Plus to take care of your Form 1040 Sch H and employment filings. You can also build a comprehensive filing solution with E-File and Software-Generated Forms with our catalogue of software products:
- W2/1099 Forms Filer
- Forms Filer Plus
- AMS Payroll
- Software Generated Forms
- E-File Direct
- Affordable Care Act Filer
- 1042-S Filer
Want to see what our software can do before you buy? Download our free demo, or talk to our Sales and Information team at (800) 536-1099. You can buy and download your software solution at any time.