Everything You Need To Know About The Best Nanny Payroll Services

If you don’t pay a nanny tax once the threshold is met, you and your nanny or household worker can be charged with tax fraud, fined, and audited. To pay for the nanny tax, you’ll need to withhold a certain amount for Social Security, Medicaid or Medicare, and income taxes from your workers’ pay. “We have used HWS for six years for our nanny, and they have done an amazing job. I just regret not hiring them for the first two years we employed our nanny!

Do I Need an EIN to Pay the Nanny Tax?

Even if you choose to pay for these services, you’ll still pay less than most other services. Regular payroll services are intended for businesses, not households, and don’t offer the features household employers need to pay their employees. Some regular payroll providers, such as Paychex and SurePayroll, offer nanny-payroll versions of their regular software. Other nanny payroll providers, such as HomePay and HomeWork Solutions, are nanny-payroll specific.

1. After conducting extensive research and analysis, we recommend SurePayroll as our 2021 pick for the best online payroll service for paying household employees.
2. Finally, while ADP’s software has household payroll capabilities, it isn’t a nanny-first provider.
3. Setup is easy enough, with a tutorial that walks you through establishing your services.
4. I have recommended your service to a colleague who has had success with you as well.
5. HomePay calculates and facilitates employee payments automatically through direct deposit or manual paycheck.
6. Failure to do so, even in ignorance, can cost you hundreds of dollars in penalties.

Best Nanny Payroll Services for Household Employers in 2022

The nanny tax service can also help you understand laws governing workers’ compensation in your state. HomeWork Solutions automatically files and pays employment taxes at all levels (federal, state, and local). For an additional $225, HomeWork Solutions can also calculate back taxes for the previous quarter. This is a service that none of the other providers on our list offer. HomeWork Solutions has both a do-it-yourself (Essential) plan and a full-service (Complete) payroll package. The Essential plan provides you the option to outsource payroll tax calculation and form preparation, including tax payments and filings, and simply handle nanny salary payouts yourself.

SurePayroll Pricing

Aside from pricing, we looked at pay and tax processing functionalities specific to nanny payroll. We also considered ease of use and customer support since household employers don’t usually have much experience with processing payroll. Still, the basic reporting you get from Paychex could be worth the monthly fee alone, giving it the edge in this category. Plus, you’ll be able to add any other data field you’d like, thanks to custom fields, which is rare for small business online payroll services. Most nanny payroll services charge per month per employee but sometimes offer annual subscriptions. Also, they usually provide multiple customizable plans that have a mix of full-service and self-service solutions.

How can I choose the right nanny payroll service for my household?

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. Most payroll software has moved to cloud-based solutions, so they’re by and large software-as-a-service (SaaS) companies.

It provides immediate payment from the employer, in addition to direct deposit and a live check sent to the employee, unlike all other suppliers. HomeWork Solutions includes a setup charge, and the year-end report is also an additional expense for budget-conscious businesses. Apart from that, both the Essential and Complete Payroll plans are only for one employee. SurePayroll still offers more strong features in our assessment than other suppliers in the market, with a 3.82 out of 5 rating.

Households with nannies or other household employees who want payroll and tax assistance. In California, SurePayroll only supports household employers who are designated as quarterly filers. Annual filers in California need to change their filing status to quarterly to use this service. You’ll need to file a 1040-ES for quarterly nanny taxes and the Schedule H (Tax Form 1040 or 1040-SR) for household employment taxes at the end of the tax year.

ADP Run can cooperate with taxation authorities (state and local) on tax deposits and returns for you, but it is not the cheapest option. ADP Run, however, is not responsible for paying and submitting federal taxes (Form 1040ES) and Schedule H, unlike the other suppliers. It just holds federal taxes until you can pay them before the deadline.

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. All payroll software is made more helpful by accounting and time and attendance software integrations, and Rippling does that and much more. Unfortunately, it isn’t easy to compare the cost of ADP’s plans to other services because ADP doesn’t publish its plans’ pricing. You’ll have to fill out forms to get a custom quote for your business, which will be based on your needs and the number of employees your business has.

Another aspect that sets Paychex apart from the competition is its HR capabilities, which will make it much easier for home businesses to manage their workers. Some software even offers more comprehensive features, such as payroll and tax support, employee onboarding, and easy preparation, filing, and payment of state and federal taxes. HomeWork Solutions has two payroll plans ranging from $165 – $245 per quarter. The more expensive plans include direct deposit payments for your nanny, in add ition to tax prep and filing.

We also look carefully at features such as employee and client portals, user onboarding services, PTO management, benefits administration, multistate compliance, and more. Paycor is a publicly traded company that provides a full suite of human capital management solutions to over 2 million users. The company’s bread and butter is its payroll software, which automates tedious and routine administrative tasks to make business payroll—including for household employers—easier. Some of payroll software’s features include on-demand pay, general ledger integration and employee self-service.

A list of nanny payroll services wouldn’t be complete without a company that references the infamous Mary Poppins. A nanny payroll service can make it easy to pay your nanny and file nanny taxes. Another benefit of SurePayroll is that you can run payroll as often as you’d like each month, such as weekly, biweekly, semimonthly or monthly. Some services have a per-payroll fee structure in which they charge you a base fee every time you run payroll.

For pricing, we considered whether a service offers a free trial as well as the affordability of its lowest and highest price tiers. If a company provided transparent pricing, that also played a part in our ratings. Families with nannies who want payroll and benefits administration support from a PEO. Upon login, the system’s homepage provides a snapshot of any tasks you need to complete. It shows your payroll status and any important reminders, such as your upcoming payroll processing dates and bank holidays.

Also, employees can submit expenses through the app to get reimbursed with the next payroll run. We were able to reduce our list of a dozen suppliers to just seven, with Paychex coming out on top. It creates a Schedule H form, which is needed to file household employment taxes, files taxes, and pays the nanny. The best payroll software for paying nannies should enable household employers to pay employees, manage payroll taxes, and help maintain compliance with tax laws. ADP is one of the biggest names in global payroll, but on top of its enterprise-level payroll solutions, it has small-business payroll software that doubles as an effective nanny tax service. RUN Powered by ADP comes with a comprehensive mobile app that employers can use to run payroll from anywhere and employees can use to update their tax information and clock in and out.

HomePay is our top pick for the best nanny payroll service because it offers a comprehensive solution for nanny taxes, compliance and payroll. It’s backed by Care.com, which operates in more than 17 countries and helps millions of households find childcare. It’ll onboard your nanny, automatically file taxes and give you access to payroll and HR experts to help with any questions. You will have access to basic features that are required for compliance and app maintenance. The app allows users to file and pay both federal and state taxes plus some local ones (nanny tax service/payroll tax service).

“So happy with the prompt responses to questions and helping me manage all of the paperwork involved in hiring and paying a nanny. They even completely managed my nanny share, which was a 50/50 split. I would definitely use HeartPayroll again.” – Reviewer on Heart Payroll’s Facebook page.

Paychex and SurePayroll are the only nanny payroll services in this guide that offer free mobile apps for household employees. These apps allow employees to access their payslips, update their personal information, and more. HomePay does not offer a mobile app, but it does have a mobile time tracker solution.

Nanny payroll services can range in price, depending on the features that you need. Some nanny payroll services have a flat monthly fee while others charge per employee. If you’re not an accountant, calculating deductions and benefits, preparing the tax documents, and filing them with the IRS (Internal Revenue Service) can be a difficult and daunting task. Thankfully, you can get help from the best nanny payroll services, so you’ll have one less thing to worry about. Below, I have evaluated and reviewed four of the best nanny payroll services (for a household employer managing a household employee) available on the market.

For full service, pay $6.25 per weekly check or $12.50 per biweekly, semimonthly and monthly paychecks. For taxes only, it’s $125 per quarter for filing and $195 for year-end tax prep. This service, which costs $45 plus $4 per employee, best nanny payroll service provides you with the proper year-end tax forms for you and your household employees. Most of the other services we looked into not only charge more for year-end tax services but also have initial setup fees of at least $100.

Unlike HomeWork Solutions, users can create and customize reports on SurePayroll by Paychex. Users who left feedback on third-party review sites like G2 and Capterra like the platform’s straightforward navigation. To find out which states were best for working parents, we used data that might indicate parents in the area had more free time to spend with their children. Unfortunately, for now Poppins Payroll is available in only 14 states and the District of Columbia. Poppins Payroll is planning to expand nationwide, though—hopefully, the other states will benefit from its stellar service, adorable website, and super low cost sooner rather than later.

So, of a nanny earns $20/hour working for a single family in your area, then you and the other family will pay around $13-14/hour each. The actual pay will depend on your earlier arrangement with your nanny, but each family typically pays around two-thirds of the nanny’s usual hourly rate for a regular nanny work. Then, you’ll also https://turbo-tax.org/ have to calculate reimbursements manually, if applicable. Census Bureau because parents with a lower rent-to-income ratio might not have to work as many hours daily to cover their family’s basic needs. Hiring a nanny can help with your child care needs, but most working parents might also want to spend time with their children.

I only did so because it was “Free” (turned out not to be free as the name implies). I only stuck with them because our number of employees was so low.” – Reviewer on Capterra. “Signing up online was pretty easy, but everything after that has been a complete struggle.

On a 5-star scale, we evaluated user evaluations, including those from our rivals; any choice with an average of 4+ stars is excellent. In addition, any program having 1,000 or more reviews on a third-party website is recommended. Paychex is one of the most popular nanny payroll software options on the market, thanks to its user-friendly interface and quick support staff. We prefer suppliers that enable workers to complete online onboarding, as well as those who give a self-service portal for nannies to see payments, update information, and/or print documents. It’s also preferable if the supplier has specialists on staff who can assist users on regulatory problems and offer workers’ compensation and other perks for your home employee.

Payroll experts are also a benefit that payroll providers offer—if you have questions about the software you’re using, you can always contact the customer support team for help. Other advantages of using nanny payroll software include access to a user-friendly mobile app, self-service capabilities and tax filing assistance. SurePayroll by Paychex is a better option than HomePay for nanny payroll services because it automatically withholds, pays, and files taxes on the federal, state, and local levels. This includes local filing for Ohio and Pennsylvania, which HomePay does not offer.

HomePay’s more robust plan starts at $75 per month, and you can get the first month free. According to the IRS, your child’s caregiver is a household employee, which means you’ll have to pay them and file taxes with the IRS and state. Because you’ll be the household employer, your nanny or babysitter will look to you to handle the administrative tasks while they care for your kids. However, managing administrative tasks well requires getting the right tools.

While this software doesn’t contain some of the more advanced features you’d find with other payroll software, what it does offer may be perfectly adequate for paying your nanny. NannyPay enables you to print out checks and tax forms for your household employee. Setup is easy and cloud-based with locally installed versions for Windows and Mac are available. The software supports up to an unlimited number of household employees. SurePayroll offers a single Household Employer plan at $49.99/month for a single employee, plus $10 per additional employee.

Their team monitors upcoming regulatory changes affecting you and provides a compliance dashboard where these updates exist. The tool will guide you through the payroll process and perform real-time calculations so you don’t make mistakes. Also worth mentioning is the software’s unique AutoRun feature, which lets you automatically process payroll—without being on a computer—for a specific day and time. Additionally, the payroll software is constantly updated to comply with local, state and federal tax laws so that your payroll environment complies with regulations. Paycor will also automatically file your taxes for you to make year-end tax preparation simpler. Nanny payroll software is essential for families that prefer not to handle payroll themselves, as it helps them comply with federal, state, and local tax laws.

Their support is great, and they stay up to date with COVID grants, taxes and basically make it, so we don’t have to think about it. Wave gives employees direct access to their key documents, pay stubs, etc., which is really important to the modern workforce. Printed tax receipts and stubs should be a relic of the past.” – Reviewer on G2.com. The online dashboard makes it easy to find all the reports I need for payroll. It’s also nice that employees have access to their own pay stubs and W2s.” – Reviewer on the Paychex website. You can also create pay stubs, pay wages through direct deposit, and even download and preview online payroll details because the app syncs with QuickBooks.

Read our reviews of the year’s best personal finance budgeting tools. Finally, while ADP’s software has household payroll capabilities, it isn’t a nanny-first provider. Its main focus is on other small-business owners, so its features might be a little too complicated (and its interface too technical) for parents with little to no payroll experience.