Many Canadian families hire nannies and caregivers who are not yet permanent residents or citizens. Maybe you’ve found someone already working in Canada on a temporary permit. Maybe you’re navigating a new immigration pathway. Or maybe your caregiver’s status recently changed and you’re not sure what that means for your payroll.
This is an area where families often have many questions and few clear answers. So here’s a straightforward guide to what changes, what stays the same, and what you need to have in place from day one.
First: Your Payroll Obligations Don’t Change Based on Immigration Status
This is the most important thing to understand upfront: as a household employer in Canada, your payroll obligations to the CRA are the same regardless of whether your nanny is a Canadian citizen, a permanent resident, or someone working on a temporary work permit.
From the moment your nanny or caregiver begins working for you, you are required to:
- Register for a CRA Business Number (if you don’t already have one)
- Deduct and remit income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums
- Pay the employer’s share of CPP and EI
- Issue a T4 slip at year-end
- Issue a Record of Employment (ROE) when the arrangement ends
None of these obligations are suspended or reduced because your caregiver holds a work permit rather than a permanent SIN. The CRA treats all employees equally in this regard.
What’s Different: The SIN That Starts With a 9
When you hire a nanny or caregiver who is on a temporary work permit, one of the first things you’ll notice is that their Social Insurance Number (SIN) begins with the digit 9.
This is a temporary SIN issued by Service Canada to people who may be legally authorized to work in Canada but are not yet citizens or permanent residents. There are a few things to be aware of as an employer:
It has an expiry date. A SIN beginning with 9 has an expiry date. As the employer, you are required to check the employee’s immigration document (typically their work permit) before they start and to confirm it has not expired, and that it has a valid status. If it does expire, you must ask your employee to contact Immigration, Refugees and Citizenship Canada (IRCC) to obtain a valid document before continuing work.
You need to collect it within three days. According to the CRA, you must obtain your employee’s SIN within three days of their start date. If they don’t yet have one, they must apply and provide it to you within three days of receiving it.
You must verify the work permit terms. The SIN alone does not authorize someone to work for you. You need to review the work permit itself to confirm the work is permitted, and that any location or employer-specific conditions are met.
You must keep it updated. If your caregiver’s SIN expiry date changes — because their permit was renewed, or they received permanent residence — they are required to inform you within three days of the change.
Setting Up Payroll for a Caregiver on a Work Permit: A Quick Checklist
Whether your caregiver is arriving through a new immigration pilot or already working in Canada on a temporary permit, here’s what needs to be in place on the payroll side:
Verify the work permit
Before employment begins, review the work permit to confirm it is valid, has not expired, and permits the type of work you’re offering.
Collect the SIN
Obtain the SIN (beginning with 9) within three days of the start date. Note the expiry date and set a reminder to follow up before it lapses.
Register for a CRA Business Number
If you don’t already have one, you’ll need to register before your first remittance. NannyTax can handle this on your behalf.
Set up payroll deductions from day one
CPP, EI, and income tax deductions apply from the very first pay period — not after a probationary period, not after immigration status is confirmed.
Confirm provincial WCB/WSIB requirements
Depending on your province and the type of work being done, you may be required to register with your provincial Workers’ Compensation Board. This applies to household employers in many provinces, regardless of whether your caregiver is a permanent resident or on a work permit.
Issue a T4 at year-end
At year-end, issue a T4 as you would for any employee. Your caregiver will use this to file their Canadian tax return.
Issue an ROE when employment ends
When the caregiving arrangement ends for any reason (the permit expires, the arrangement changes, or the caregiver moves on), you are required to issue a Record of Employment to Service Canada.
A Note on Net vs. Gross Pay
One situation that comes up more often when hiring caregivers through immigration pathways is the question of net versus gross wages. Some caregivers, particularly those new to the Canadian system, may negotiate based on a “take-home” net figure rather than a gross salary.
If that’s the case, it’s important to understand that as the employer, you are still responsible for all payroll deductions, which means the true cost to you is higher than the net figure alone. It’s worth having this conversation clearly upfront, and making sure your employment contract reflects the gross wage so there are no surprises on either side.
What Happens When Your Caregiver Receives Permanent Residence?
If your caregiver’s immigration status changes, for example, they receive permanent residence through one of the new pilots or another pathway, a few things happen:
- They will receive a new, permanent SIN (one that does not begin with 9 and has no expiry date).
- You’ll need to update their SIN in your payroll records.
- Your payroll obligations remain exactly the same. Nothing changes in terms of deductions or remittances.
It’s a straightforward update, but one that’s easy to miss if you’re not tracking it actively.
Don’t Navigate This Alone
Hiring a caregiver through an immigration pathway adds a layer of complexity to household payroll, not because the rules are completely different, but because the details matter more. A SIN that expires unnoticed, a work permit that wasn’t properly verified, or payroll deductions that were set up incorrectly can create real problems down the line for you and for the caregiver who depends on you as their employer.
At NannyTax, we’ve been helping Canadian families navigate household payroll since 2006. We’ll make sure your setup is correct from the start, keep track of the details that are easy to miss, and give you one less thing to worry about.
Have questions about your specific situation? Reach out to us at taxquestions@nannytax.ca. We’re happy to help!
Note: Immigration rules and program details can change. For the most current information on the Home Care Worker Immigration Pilots and work permit requirements, always refer to Canada.ca or consult a qualified immigration professional.