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March 06, 2022

Nanny taxes simply too much for some parents

Nannies are in short supply these days, thanks largely to the government's decision to issue them open work permits that allow them to work outside of an employer’s home and in the field they choose. As a result, many have since given in their notice.

If you're recruiting or just trying to keep your current arrangemtens together, make sure you're up to date on the nanny tax, the tariff the government wants from those who employ such home workers.

AdTo be onside, you need to have a payroll deductions account with the Canada Revenue Agency as well as an active file with your provincial Workplace Compensation Board. You're expected to deduct taxes at source and also required to remit employment insurance and Canada Pension Plan contributions as well.

If your nanny lives in and you're providing room and board, then the market value of the meals and accommodation must be added to their pay as a taxable benefit as well.

To wrap things up, you should have completed a T4 slip confirming all of the above last week. Lagging a bit here? New to the nanny search?

Try out services like Tax4Nanny or Shureconsulting, two turn-key solutions for those who want relief from the headaches of government-related paperwork and tax filings for nannies and other caregivers.

Parents pay $300 to $500 annually for services like these, a small expense compared to the $2,000 or so a month in salary and other fees it often costs to employ a nanny legally in Canada.

If you're employing a nanny, do you look after things yourself or have someone else handle the paperwork? Has this been an issue? Or are you one of those who can't find help to begin with

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...