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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Mrsweisass on July 21, 2020, 06:35:31 PM

Title: Running PT Nanny Payroll myself
Post by: Mrsweisass on July 21, 2020, 06:35:31 PM
Hi there!  Still working, and so is my partner, and with four kids we have decided to hire a PT nanny (college student who is deferring for the year). We want to do things above board rather than under the table, which means taxes.  I thought I had found a reasonable service that would handle that for me, but they donít operate in my state. I ended up finding an intriguing option ( that runs the numbers for you and tells you what to deduct, pay, etc.  My only hesitation: how hard is it to do all of that yourself? I am not afraid to DIY, but I am afraid of screwing up taxes and getting a big fat bill.  So if anyone has experience doing this themselves and can give me some advice, I would really appreciate it!
Title: Re: Running PT Nanny Payroll myself
Post by: red_pill on July 21, 2020, 07:49:13 PM
I did it.  It really isn't hard once you figure it out.  Think about it - every small business has to do payroll, and not everyone hires a payroll service.  And that's all you are - is a small business providing employment to one person.  Where I live there is an online payment calculator that told me how much to withhold, how much I had to pay on top of that, and  I could pay it online.   Don't forget whatever insurance you may need.   

Yeah, those payroll companies are just packaging up something that you can totally DIY.  Just jump in and give it a try. 
Title: Re: Running PT Nanny Payroll myself
Post by: MissPeach on July 24, 2020, 09:19:18 AM
I used to do payroll for companies. It's not that hard if you are OK with things like doing your own taxes. I haven't done it in a long time but the IRS usually publishes something with the rules, wage limits, and tax tables. The state and local agencies usually do too. That's a good free read with everything you need to know.

If I remember correctly there are special rules for domestic help versus a business so I would look into that. I would also look into who requires taxes paid and what accounts/filing IDs you'll need for reporting/payments. The IRS is a given but state and local requirements vary.
Title: Re: Running PT Nanny Payroll myself
Post by: marbles4 on July 24, 2020, 09:29:49 AM
I also did it myself when our oldest was little (2012-2013). It was not difficult and I am not a CPA.

Check out the IRS website, which has good resources:

You are doing the right thing!
Title: Re: Running PT Nanny Payroll myself
Post by: Mrsweisass on July 26, 2020, 08:14:00 PM
Thanks all. I have an appointment with the IRS website tomorrow, and will be reading up on everything so that we can get things started above board.  Thanks for the pep talk!
Title: Re: Running PT Nanny Payroll myself
Post by: Proud Foot on July 27, 2020, 09:18:32 AM
If you wanting to DIY definitely read up on everything on the IRS website about federal regulations. Also look at what is required at your state level: income withholding, unemployment, workers comp.

As far as the actual payment I would use something like  Paycheck City  ( to calculate the tax withholding and print the pay stub. I would also keep a copy for yourself and also a spreadsheet with all the details (pay date, gross, net, all tax withholding). This will make it a lot easier when you issue the caregiver a W-2 at the end of the year and filing your personal taxes.
Title: Re: Running PT Nanny Payroll myself
Post by: CNM on July 27, 2020, 10:56:52 AM
We do payroll for our nanny ourselves, however my spouse is a CPA so perhaps that makes things easier!

In our state, we need to register as a household employer and file monthly taxes.  This can be somewhat tricky -- I've seen many small businesses mess it up.  That being said, it is totally DIYable.  I'd definitely look into your state requirements in addition to the federal.  Look for "Department of Taxation and Revenue" or even possibly "Department of Labor" for guidance. You will also, of course, have to adhere to your state's wage and hour laws.