Answers

How To Do Payroll for Nanny Share

Payroll for just one nanny and family can be a challenge, but payroll for a nanny share can be an even longer process. 

It’s beneficial for each family to be registered as individual employers so that they can claim what they pay for the nanny on their income taxes under the childcare tax credit.This means that each family has their own CRA business number, and pays the nanny from their own bank accounts. 

The nanny should be filling out federal and provincial tax forms for both families and indicating on one copy that they have another employer so they are taxed accordingly.

When a nanny indicates that they are working for two families, money from one employer will be taxed as “code 0” and the other as “code 1”. This means that for one employer, she is taxed with the basic personal exemption amount (code 1) and for the other employer, she is taxed without any exemption amount (code 0)

You’ll notice each family’s out of pocket cost is the same, and the difference lies in her deductions and net pay amount.