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How To Include Non-Taxable Benefits To Your Nanny’s Payroll
Let’s talk about nanny benefits! When setting up payroll for your household employee, it’s worth your time to consider adding one, or several benefits, as part of their total pay. Specifically, the IRS has a set of what they call “fringe benefits” that are considered non-taxable forms of compensation. This means the value of those benefits when added to your nanny’s payroll is not subject to taxes for you or them. Wahoo!
2022 IRS-approved non-taxable compensation benefits for household employers:
- Health Insurance premiums from a state-licensed insurance provider.
Note: If you have multiple employees, you must set up an Individual Coverage Health Reimbursement Arrangement (ICHRA), Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) or purchase a policy through SHOP (Small Business Health Options Program) to gain this benefit.
- Up to $280 per month toward public transportation to and from the worksite. Note: Families in Massachusetts are capped at $150 per month for this benefit.
- Up to $280 per month toward parking at the jobsite and/or at the public transportation facility. Note: Families in Massachusetts can contribute up to $285 per month for this benefit.
- Cell phone service reimbursement provided that using the phone is a necessary requirement of the job.
- Up to $5,250 per year towards tuition & books for an accredited college or university.
“Using any number of non-taxable benefits means your caregiver’s gross wages are lowered by the value of the benefits you provide,” says Tom Breedlove, Sr. Director of HomePay. “So, when you’re calculating how much in taxes you have to withhold from your caregiver and pay on your own, you use this lower value, which ultimately saves you and you caregiver money.”
A payroll example using non-taxable benefits:
Say you’re paying your caregiver $600 per week with no additional benefits added and they fill out their Form W-4 as Single with no dependents. Each pay period, this is what your care budget and their net pay will be approximately:
|Your Caregiver:||Your Care Budget:|
|Gross wages – $600||Gross wages – $600|
|Taxes withheld – $95.71||Employer taxes – $53.49|
|Take-home pay = $504.26||Total weekly cost = $653.49|
Now, take the same caregiver, but you’ve decided to include $25 per week in health insurance and $50 per week for public transportation as part of their payroll. So even though you’re paying them $600 per week, you’re now excluding $75 of that from taxes. Let’s look at how weekly payroll looks now:
|Your Caregiver:||Your Care Budget:|
|Gross wages – $525||Gross wages – $525|
|Taxes withheld – $80.97||Employer taxes – $46.90|
|Non-taxable benefits – $75||Non-taxable benefits – $75|
|Take-home pay = $519.03||Total weekly cost = $646.90|
As you can see, in this scenario, the caregiver is actually saving $15 per week with these benefits added to their payroll. It may seem like a small amount, but over the course of the year, it’s a nearly $800 difference (these amounts may increase savings with higher benefits and or higher rates).
For your household employment taxes, you’re saving $6.59 per week – or $342.68 for the year. Every little bit helps if you’re on a tight budget, so the work in setting up payroll this way from the beginning is probably worth it. The experts at HomePay are happy to help you budget for your caregiver’s payroll by including any of these forms of non-taxable compensation.
Ways To Teach Your Children Responsibility Around The House
As parents we do our best each day to teach our growing children everything we can. One of the most important and essential things we can help teach them is responsibility. Responsibility can be implemented as early as preschool and will help them shape into responsible teens and adults who can do things on their own as they age. It can also instill a sense of independence and belonging to a combined effort. Have you ever wondered how you can teach your child to be more responsible? We have put together several ways you can support your children in day-to-day responsibilities in and around the home.
Tasks At Home
Assigning tasks at home is a great start at teaching your children responsibilities. Children can help with tasks such as setting the dinner table, folding laundry, taking out the garbage and keeping their own rooms tidy. Make sure to let them know that these actions are a great contribution to the household. An interactive chart that you hang somewhere in the home is a wonderful way to let children know what is expected of them. Try including them on creating their chart to talk about which tasks they are responsible for and why.
Tend a Garden
Gardening offers many mood boosting benefits for people of all ages, so why not include our children in the fun? Children can help dig up dirt, plant seeds, and pick the labors of their work once the garden starts growing. Feel free to purchase your children their own gardening hand tools to support their responsibilities while gardening.
Caring For Pets
Pets are a wonderful way to let your children have something to love, play with and better yet help care for! Showing children how to care for your beloved pets at home is a great way to teach them how to care for other living beings other than themselves. Whether it is sprinkling fish food in the tank every morning before school or feeding their dog breakfast, caring for pets is a responsibility parents can assign to show trust.
Helping with Younger Siblings
Wondering how your older child can help and feel even more connected with their younger sibling? There are many things your child can do to help such as helping with feedings, grabbing a burp cloth, wiping up a mess or pushing the stroller on a walk. Children will often be more interested in doing certain tasks especially if their younger sibling cannot do them yet. It will become a special responsibility that only “they” get to do. You can reward them with a thoughtful personalized book about being an incredible older sibling.
Children’s responsibilities can be helpful no matter how big or small. Whether they simply threw their wrapper in the trash or helped set the entire dinner table it is a great way to instill confidence and practice gratitude with one another.
Celebrate Black History Month
Our team at Educated Nannies is looking forward to welcoming a new month with many opportunities to celebrate. February is Black History Month! It is a wonderful chance to commemorate the history of African American people and pay tribute to all the inspiring Black men and women we know and love today. In our blog we will be sharing a few ways to teach, honor and recognize Black creators with your family.
Visit A Local Museum
A great way to educate yourself and your littles on the great achievements and history of African Americans is to spend the day at your local museum. Here in Los Angeles, we have so much at our fingertips including California African American Museum. CAAM is a beautiful place filled with a collection of over 5,000 objects dating way back to the 1800’s all the way to today! They even offer a Prosperity Market for children and teens where they can enjoy fresh produce, listen to music, watch cooking demonstrations and so much more all while recognizing Black farmers, chefs and entrepreneurs!
Enjoy A Delicious Meal
What better way to support your local Black owned businesses is better than enjoying a wonderful meal? In our opinion it’s one of the best! There is an abundance of restaurants with a wide variety of flavor offerings right here in Los Angeles. From fine dining, Caribbean flavor, Vegan options and green juices we can enjoy and support these amazing establishments while supporting our Black community. Black Book LA has an incredible list of Black owned eateries for you to check out with your family. And for anyone who has a sweet tooth be sure to check out Southern Girl Desserts to fix that craving!
Donating is a wonderful way to give back to your community and support the people all around you. We have so many different choices when it comes to donating to a program in need these days! California Black Women’s Health Project is an organization that is committed to focusing on the health of Black women and girls while empowering Black women to take responsibility and advocate for their own health.
Read A Book
Are you always looking for great books to add to your children’s bookshelf rotation? Well, we have got you covered! Malik Books has rounded up some amazing children’s books about Black leaders, inventors and creators. Some of our favorite books on this list are Little Leaders: Bold Women in Black History, We’re Different, We’re The Same and I Am Enough. Happy reading!
We hope you and your family enjoy celebrating the incredible accomplishments of African Americans. Please share all the fun activities you are doing with us at Educated Nannies!
Halloween Safety Tips!
Happy October! A month that is filled with all the quintessential things such as pumpkin spice, apple cider, cooler weather, crunchy leaves, pumpkins and let’s not forget Halloween. Many of our children have been waiting all year to put on their favorite costume and run around the neighborhood to collect all their most enjoyed candies. However, many of you may still be slightly nervous about letting your children trick or treat this year with the concern of COVID-19. As cases have dropped in Los Angeles County and the CDC has given the green light to trick or treating this year there are still many precautions and safety tips to remember. We are sharing some helpful safety tips this holiday so you and your family can all enjoy Halloween together!
A responsible adult should always accompany small children throughout the neighborhood. If your child is going out alone with friends be sure to leave them with a flashlight and even a cell phone for anything that may come up.
With many pedestrians and cars in the neighborhood, be sure to keep an eye out for darting children. Drive slowly and make sure your vehicles headlights are turned on though out the evening even if it’s still light outside.
Check for Allergens
If you child has a food allergy, be sure to check the ingredient label on commercially wrapped candy to make sure they don’t contain any allergens. Remember to skip any homemade treats as you may not be sure of what they contain. You may even see some homes that have a teal colored pumpkins which indicates they are a home that is aware of food allergies and are raising awareness for others!
To make sure your child is easily seen try decorating their treat bag or costume with reflective tape or stickers. Also, try and use light colors if possible and have your child hold glowsticks or flashlights with them to be seen by drivers.
Around The House
When decorating the inside of your home always consider fire safety. Do not over crowd electrical outlets with lighting and special effects. Keep your carefully carved jack-o-lanterns away from window drapes, decorations, and any other flammable materials. A battery-operated candlelight is a great safe option for indoor use!
Many of our children’s costumes require props and accessories to add to the fun! To make sure they are safe while trick or treating try to include accessories that are made from cardboard or flexible materials. Do not allow children to carry around sharp objects that could harm themselves or others. Try something like these fun and soft pirate costume props!
Please remember some of these safety tips this year before heading out to collect your treats. We hope you and your family share a happy and safe Halloween this year in your neighborhood!
National Nanny Recognition Week! (September 19th-25th)
Do you have a rockstar nanny that supports you and your littles each day? If so, National Nanny Recognition Week (September 19th-25th) is the perfect time to celebrate them and show them your gratitude and appreciation. This is also an opportunity for your children to say thank you to their nanny for being a positive role model in their life. Remembering to say thank you is so important, and we are sharing some ideas on how you and your children can show them your gratitude!
A SPECIAL MEAL
Food is always a great way to honor someone for National Nanny Recognition Week! Prepare their favorite meal for them and have your child(ren) act as servers to make it fun and extra special. If cooking is not your thing, you can also order take-out from DoorDash, Grubhub or UberEats, and have food delivered right to their homes quickly and safely!
SURPRISE PAID TIME OFF
National Nanny Recognition Week is a wonderful opportunity to offer an extra day of paid time off to your hardworking nanny. It can offer him or her some extra time for those errands they haven’t been able to get around to or maybe they would like to just hang at home and watch Netflix all day. Either way you cannot go wrong with this fun surprise!
SPA DAY OR MANI/PEDI VOUCHER
Caring for kiddos can be physically and emotionally demanding. A gift card to a nearby spa or nail salon is a wonderful way to say thank you and may be just what you nanny needs to relax on her free time!
MAKE A MEMORY BOOK
Your nanny probably spends many long days with your little ones and each day creates special moments big and small. Put together some photos or take some new photos to put together into a memory book that you nanny can hold special to their heart!
Write a letter of appreciation to your nanny and then gift them a bonus! Maybe they’ve been saving up for something special like a class with Newborn Care Solutions or membership to the INA? This would give them just enough to finally splurge on themselves! Additionally, it shows them how grateful you are to them for being such an important part of your lives.
WORDS OF KINDNESS
Thank your nanny and tell them how wonderful they are and highlight some of their best qualities. It feels good to be loved and hear positive things about yourself! Words of kindness go a long way and can really make a person feel appreciated. Above all, words of kindness make the world a better place! Read some of our testimonials and the kind words our families have said about their nannies here.
A SMALL GIFT
Who doesn’t love to receive a small gift as a token of appreciation? Maybe they love coffee, or jewelry, or could use some new gear for camping? For safe and contactless delivery another great option is an Amazon gift card that you nanny can use for whatever their heart desires!
A BEAUTIFUL BOUQUET
No matter the occasion, a bright and cheery bouquet of flowers is always a great way to put a smile on someone’s face. Send a vibrant arrangement from your local florist and be sure to add a sentimental note to let your nanny know how much you appreciate them!
THANK YOU TREASURE HUNT
This is a great activity to also get your children involved in! You can have them make sweet arts and crafts or hide small gifts that you want to surprise your nanny with. Be sure to write clues or even make a treasure hunt map to go on an appreciation hunt together.
THROW A NANNY PARTY
What better way to celebrate your amazing nanny by throwing them their own party? Try decorating the house, making a fun treat to share, and putting on some of their favorite music to celebrate how amazing they are to your family!
HAVE A FABULOUS WEEK CELEBRATING YOUR EDUCATED NANNIES FOR NATIONAL NANNY RECOGNITION WEEK!
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