Payroll for Your Nanny or Caregiver: Getting Started
After having completed the interview process to find the perfect caregiver for your family, you anxiously await the day when your nanny will start their new position with your family. The contract was signed, the family’s excited, but now there’s some paperwork for you to do. How do you get started on Nanny Payroll?
Step 1: Get a business number with the Canada Revenue Agency (CRA)
The business can be set up as a sole proprietorship or as a partnership. When the CRA knows that you are opening an account for the purpose of hiring a domestic worker, they understand that the business number is for payroll purposes only. They will expect you to make monthly remittances to your new payroll accounts by the 15th day of the month following payroll. Then, by the last day of the month in February following the year of payroll, you will need to send in a T4 and a T4 summary to the CRA.
Of course, the CRA may not be the only government body that you need to deal with. You need to find out whether you’re obligated to register with the Provincial Workers Compensation Board. If you are, then you will need to do this within the first few days that your caregiver starts to work.
Step 2: Make sure that your pay statements are all ready
Each province has a requirement that you provide your employee with a pay statement or a pay stub. In general, it will show the following:
- Names and addresses of the employer and the employee
- Period worked
- Pay date
- Gross pay
- All the deductions
- Net pay
- Regular and overtime hours worked
- Year-to-date amounts
Of course, accurate record keeping and calculations are key to being successful in this. As an employer, you need to make sure that you are up to date on any changes to your statutory obligations and administer these changes on a timely basis.
We know this could all sound overwhelming, but don’t worry. NannyTax is here to help! We have provided clients across Canada with nanny tax frustration relief for many years and can do the same for you too. Check out our package options here: https://nannytax.ca/pricing/.
