8 Best Nanny Payroll Services for Household Employers
Nanny services assist parents in juggling childcare and employment. Finding the perfect individual for your family is frequently the most difficult step. However, if you hire a home employee, you will need to alert the Internal Revenue Service so that they won’t come after you for any unpaid taxes.
Large fines may be imposed for failure to file Schedule H (household employment taxes) and payroll taxes. According to previously released IRS data, “just 5.3% of household employers submit Schedule H” and properly demonstrate nanny tax compliance.
This led the IRS to crack down on nanny tax compliance, along with a number of high-profile incidents.
Thankfully, there are numerous nanny payroll service systems available to automate all or part of the payroll procedure. To assist you in locating the ideal answer, we’ve put together a list of the 8 best nanny payroll services for household employers.
Read on as we take a closer look.
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FreshBooks has paired up with Gusto, a small business-focused payroll solution that is simple to use and easily integrated with FreshBooks. In addition to countless other services, they offer unlimited payrolls, automatic tax filing and payment, and direct deposit.
A quick and simple setup allows Gusto to fully connect with FreshBooks, and if you need assistance, you can obtain step-by-step support.
Access limitless payrolls, automatic tax filing and tax payments, direct deposit, W-2s, and 1099s. Additionally, FreshBooks automatically adds every payroll transaction as a cost to your account.
- Automated payroll tax services filing
- FreshBooks integrates with multiple payroll providers
- A dedicated account manager to train your team and migrate your books from other platforms
- Access to lower credit card fees and transaction rates
- 2 free team member accounts
- Although Freshbook’s features cover every base, they aren’t specifically set up for nanny payroll
SurePayroll was the first business to offer online payroll for small businesses in 2000, and it has since provided a user-friendly, adaptable service at a reasonable price. Its Nanny and Household plan enables you to pay your employee while ensuring that you adhere to all applicable tax-related regulatory requirements.
SurePayroll started out as a small business service but quickly expanded its selection to include a cloud-based solution for nanny payroll. SurePayroll offers simple-to-use mobile tools and an assurance that taxes will be filed. Making it a great choice for parents.
- Full-service tax filing and calculation
- Runs of automatic payroll
- Dependable mobile app for payroll on the go
- Higher starting price compared to some rivals
- Processing payroll just for two days
It can get expensive adding extra employees to your payroll if you work with multiple types of childcare providers. For example, you could have after-school nannies, full-time summer nannies, weekend babysitters. This is because some organizations charge extra for each additional payee.
But Savvy Nanny helps you out in this regard as you simply pay an additional $6 per person after the first two employees are covered by the one flat rate.
This makes Savvy Nanny payroll software a very affordable choice for households that employ more than one childcare professional.
- Flat rate additional employee payment
- Affordable option
- An interface that is user friendly
- No contracts are required
- In some places, it is impossible to process county or city taxes
- The service does not assist you in obtaining an EIN
Payroll by Wave is a versatile alternative that enables you to halt payroll without incurring any fees for however long you need to—while keeping your account open. This means that you’re only paying for employees that are currently working, making it a great choice for keeping track of seasonal childcare professional hirings.
Even if some of your personnel only work a portion of the year, Wave Payroll makes it simple to keep track of pay periods, taxes, and nanny information. You can locate their name and reactivate your employee so that you don’t have to submit information each time a nanny returns to your family. Wave Payroll stands apart from other software because of its offboarding features even though it is great for year-round use.
- 30-day risk-free trial
- 100% accuracy is assured
- Easy-to-use dashboard
- Only 14 states offer full service.
- No mobile app
- No integrations with outside parties
The most expensive choice on our ranking of the top nanny payroll services is HomePay by Care.com. It handles every step of the procedure, including adding your employee to its database, processing payroll, and handling taxes. Your employee can access a self-service portal, and you have unlimited access to pay your payroll records.
“Concierge support” is offered by HomePay. This entails that you will always have access to phone, chat, email, technical support for your employee’s onboarding, and audit support, as needed.
- Creates accounts for new household employers for federal and state taxes
- Maintains records of PTO accruals and other payments
- Experts on staff to provide compliance advice
- Access to the network of household helpers and caregivers on Care.com
- Doesn’t prepare local taxes, file them, or pay them
- Year-end tax preparation is more expensive.
- Access to employee health insurance policies is restricted
A list of nanny payroll services wouldn’t be complete without a company that references the infamous Mary Poppins.
One of the best things about Poppins Payroll is their user interface. It’s colorful and enjoyable to interact with, and it lists out its services and fees with complete and utter transparency.
Poppins Payroll takes care of your tax preparation, payroll and tax computations, tracking of PTO and sick leave, and new company registration. Yet, its offerings are modest when directly compared to the rest of the options on this list.
- Low costs
- Extensive accounting
- High level of usability
- Only available in select states
- Has a modest set of offerings
GTM Payroll Services
GTM Payroll Services manages your payments and benefits with ease as a qualified insurance and benefits broker. You may find and keep a nanny by offering advantages like a 401(k) plan or by complying with your state’s workplace compensation insurance requirements.
They are also able to organize your employee’s workers’ compensation, health, dental, and vision insurance as well as their tax-savings programme.
GTM Payroll Services is one of the top payroll companies for providing employee benefits because it is also a certified broker and offers a wide selection of benefits in 28 states.
- Numerous benefit alternatives
- Adaptive client services
- No assurance of tax penalties
- There must be a six-month contract.
- Expensive setup fees
- more costly than other offerings
Your payroll is completely handled by NannyChex, including recording of PTO or sick time.
NannyChex is an all-in-one system designed exclusively for paying home employees. Get free assistance with each payroll step, then automate it to eliminate your concern over quarterly or annual tax compliance. This economical payroll solution offers everything you require, making it the most complete choice.
You’ll even be assigned a personal account representative, allowing you to contact them directly if you have queries or issues with your account.
- No contract is necessary
- Manages all local taxes across all 50 states
- Unlimited free support
- No mobile app
- Additional charges for processing payroll
- Exorbitant year-end costs
FreshBooks and Gusto’s payroll services are your best option if you’re looking for a nanny payroll provider with easy software setup, friendly customer service, and affordable cost.
However, FreshBooks is by no means your only option. The best nanny payroll services that we choose also have a lot going for them.
But as with any choice, you should always pair advice with your own research. Nobody knows better than you what kind of Nanny payroll service you’re looking for, so make sure you find one that fits all of your individual needs.
FAQS on Nanny Payroll
Do I Need a Nanny Payroll?
Nanny payroll takes a lot of stress away from the financial organization side of hiring a nanny.
How Does the Nanny Tax Work?
If you pay your nanny employee $2,400 or more in cash wages in 2022, you must lawfully deduct FICA taxes from their pay. There is one flat rate for these taxes.
Can a Nanny File as Self-Employed?
The IRS views you as household employees, not an independent contractor, if you are a nanny or other caregiver who looks after others’ children in the home of your employer. And you have been given particular job responsibilities as a household employee.