How to Properly Hire a Caregiver and Pay Caregiver Taxes
Tax season is far away, but the obligation to collect and report caregiver taxes is not. If you employ a nanny, caregiver taxes are an important part of your everyday life and they are something that you must stay on top of if you want to avoid getting into trouble with the Canada Revenue Agency. Tax4Nanny helps families understand caregiver taxes and their obligations towards the government.
If you recently hired a caregiver for your children, it is important to be prepared and to know what the government will expect from you. First off, the government doesn’t see your nanny as an independent contractor. In most cases, they will see your nanny as an employee and they will expect you to collect caregiver taxes like CPP, EI, and other amounts from their salaries as any other employer would from their employees. Trying to cheat the system isn’t a good idea and it will get you into trouble.
Now that we are passed that, you should verify that your nanny is eligible to work in Canada. These may seem insulting, but due to the nature of the industry, some nannies are often working on expired visas or they lack proper eligibility to work within Canada. The last thing you want is to get into trouble because you were employing someone illegally.
Once you work out those details, the next step is to start collecting caregiver taxes from your caregiver’s salary. If you don’t do that, they will more than likely have a large debt come tax season and you will put yourself at risk of being audited for failing to disclose that you employ a nanny. You are expected to pay all federal and provincial taxes on your nanny’s salary.
One of the most important rules for an employer is to keep detailed records. Keep track of all relevant tax information, your nanny’s social insurance number, their dates of employment, their pay schedule, any necessary tax forms, past notices of assessment, and a detailed record of your previous tax deposits. This may seem like common sense, but many employers fall behind and quickly become overwhelmed by the responsibility of being an employer.
Making Caregiver Taxes Easy
For most people, this sounds like a giant headache. Let’s be honest, caregiver taxes aren’t always easy and they certainly aren’t for everyone. Relax, take a deep breath, Tax4Nanny is here for that reason. Our team of dedicated accountants have years of experience in the industry and we have been helping families understand their caregiver taxes for a long time. You could say we are passionate about taxes, if that is something that is even possible.
Payroll services for caregiver taxes have become increasingly popular over time as families continue to hire nannies and are looking for ways to simplify the tax process. Our payroll services offer you an easy way to register with the CRA, personalized tax calculations including amounts owed and eligible tax credits and tax deductions, T4s, record of employments, basic immigration services if required, remitting to the CRA, online pay-stubs, and direct deposit services for your employee. With our service, you will not have to worry about collecting and processing all of your caregiver taxes, we will do it for you.
We offer a reputable service that has been simplifying the lives of Canadians for a long time. Our head office is located in Toronto, Ontario, but we offer our caregiver tax service to clients throughout the GTA and all of Canada. Take advantage of our easy to use system today and never worry about caregiver taxes again. Our system will allow you to focus on your family and not on your finances.