Nanny Tax & Payroll Service FAQs

Not sure how a nanny tax service works? Questions about GTM’s nanny tax and payroll service? Get answers here.

Select a category to jump to related questions.

Signing up for a Nanny Tax and Payroll Service

About EasyPay®

Paying an Employee

Obtaining Workers’ Compensation Insurance

Switching to GTM Payroll Services

About GTM Payroll Services

Signing up for Nanny Tax and Payroll Service

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What information do I need to do to sign up for your service?

The initial sign-up is quick and easy. We just need some basic information like name, address, email, phone, number of employees, and your Social Security number to get your account set up. We may ask you if you would like workers’ compensation insurance when it’s required in your state and whether you would like to add HomePunch, our timekeeping service. If you’re unsure about those services, feel free to decline them. You can always add them at a later date if you wish.

I don't know my employee's information. Can I still sign up for your service?

Absolutely. Employee onboarding occurs after you sign up for a service. We’ll just need your employee’s email address. We’ll send them an email and they can provide their information through a secure, online portal. They can also call us at (800) 929-9213 and select 1 for a household employment expert. We can take care of it over the phone.

Will my credit card be charged in full after purchasing your service?

Yes, you’ll be charged the full amount for the term you choose (12-month or 6-month term). If you need to cancel your service for any reason, let us know and we’ll refund any remaining months on your term. The setup fee is non-refundable.

Do I need an EIN before signing up?

No, we will obtain your federal employer identification number (EIN) from the IRS as well as your state tax id.

Is there an additional charge to pay my employee weekly?

No, you choose how often you would like to pay your employee whether it’s weekly, bi-weekly, or even monthly. Keep in mind that in some states, like New York, you’re required by law to pay a household employee weekly.

Does GTM charge extra for direct deposit?

No, direct deposit is included in the monthly cost.

Are there any additional charges beyond the monthly fee?

When you sign up, you’ll be charged a set-up fee. This includes obtaining your Federal Employer Identification Number (EIN) and state tax ID and filing your new hire report with the state.

There is an optional year-end fee to create your Schedule H (you’ll file this with your personal tax return), provide a Form W-2 for your employee, and file Form W-3 with the Social Security Administration.

If you choose to obtain workers’ compensation insurance through GTM, there is a small administration fee plus the cost of the coverage.

Also, HomePunch, our timekeeping service, and any additional benefits your wish to provide your employee, like health insurance or a retirement plan, will involve additional costs.

What does the setup fee include?

The setup fee includes obtaining your federal employer identification number (EIN) from the IRS and your state tax id. We’ll also file a new hire report with your state.

What if I have more than one employee?

Each additional employee is $20/month. If you had two employees, EasyPay® would be $90/month. The setup fee and optional year-end fee would remain the same.

If I’m in a nanny share, do all the families pay nanny taxes?

Yes, each family in a nanny share is considered an employer and must pay employment taxes. Each family must also pay at least the prevailing minimum wage rate. Your nanny would receive a paycheck from each family on payday and a Form W-2 from each family at tax time.

How do I set up a senior care payroll account?

When setting up a payroll account for senior care, we just need to know some information about the senior receiving care as they will be the employer. Someone else, like an adult child or spouse, can be the point of contact and manage the account. The senior can be left entirely out of the process if desired.

About EasyPay®

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What is included in your service?

With GTM, we’ll:

  • Obtain your federal employer identification number (EIN) from the IRS as well as any state tax ids
  • File a new hire report with your state, which is a requirement for all employers
  • Pay your employee on payday with either a live check or direct deposit
  • Withhold the federal and state taxes your employee owes
  • Provide your employee with a pay stub
  • Remit your employee’s taxes and your employer taxes to the IRS and state tax agency on a quarterly basis
  • Provide access to an online dashboard for both you and your employee to view and download payroll and tax information

You’ll also have unlimited support from a team of household employment experts available by phone, email, and live chat.

Do you obtain tax IDs for me?

Yes, we’ll obtain your federal employer identification number (EIN) as well as your state tax id and file your new hire report with your state. If you already have tax ids tied to your household employment, we can use those instead of setting up new ones.

How does employee onboarding work?

It’s simple. Once you’ve signed up for an account, we’ll ask for your employee’s email address. They’ll receive an email that details what we need from them including Form I-9, Form W-4, and bank account details for direct deposit (if desired). It’s all done online although your employee can call us if they need help or prefer to do it over the phone. We have Spanish-speaking support representatives as well.

How long does it take before my employee's first paycheck?

It’s typically eight days from account setup to an employee’s first paycheck through GTM. If your employee needs to be paid while your account is being created, we’ll let you know their net pay. You can then pay them by personal check and we’ll account for that when determining tax responsibilities.

Is there an online dashboard where I can see payroll and tax information?

Yes, you can log in to your dashboard at any time, from anywhere, from any device to view and download tax and payroll information. You can make changes to payroll, like updating an employee’s hours for a pay period, track paid time off, and more, all through your employer dashboard.

Can I track my employee's PTO through GTM Payroll?

Yes. When you have access to your employer dashboard, you can enter how much paid time off you wish to provide your employee. You can break it into categories like sick time, vacation time, and paid holidays, or just keep all hours as PTO.

Will my employee receive a paystub?

Yes, your employee can opt to receive their paystub by email if they have direct deposit. Paystubs will also be available to view and download from their online employee dashboard.

What if I need to change my employee’s pay?

With GTM Payroll, you’ll set up a standard payroll, which includes the number of hours worked and hourly rate. If you need to adjust anything about your employee’s pay for a particular pay period – add or subtract hours, include a bonus, etc. – you can make those changes online through your employer dashboard. You can also call or email us with any changes. If you don’t need to make changes, then the standard payroll will process automatically.

What happens if I need to stop processing payroll and cancel my account?

If you need to stop processing payroll for whatever reason – you no longer have a nanny, for example – then simply let us know and we’ll refund the remaining months on your account. After canceling your account, you’ll still have the option to receive our year-end service, which includes documents like Schedule H, Form W-2 for your employee, and Form W-3 for the Social Security Administration. If you’re going to hire again, you can put your account into an ‘inactive’ status. which will allow you to quickly onboard a new employee and start processing payroll again.

Is GTM Payroll just for families with nannies?

No. While families hiring nannies is the most popular form of household employment, we can handle payroll for senior caregivers, housekeepers, chefs, chauffeurs, private teachers, tutors, personal assistants, mothers’ helpers, and more. We even do payroll for entire estate staffs. If you’ve hired someone to work in your home, we can help with the payroll and taxes. Don’t be thrown off by the terms ‘nanny payroll’ and ‘nanny taxes.’ We can do much more than that!

Paying an Employee

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Why can’t I use my Social Security number to pay household employment taxes?

Since you’re a household employer, this requires employer tax ids. A Social Security number is used when you’re being paid as an employee. Having an employer tax id also keeps your household employment taxes separate from your personal income taxes. 

Can you show me how much I may owe in household employment taxes?

Yes, you can use our nanny tax calculator to estimate how much you’ll owe in employer taxes. It will also show your employee’s take-home pay after taxes are withheld.

What does paying in arrears or weekly lag mean?

Paying your employee in arrears, or with a weekly lag, means compensating them on payday for work performed from the previous pay period instead of the current pay period. Typically the lag is one week. For example, your nanny works Monday through Friday and payday is every Friday. Paying in arrears means on this week’s payday, they will get paid for their previous week’s work and the current week’s work is paid next Friday. Paying employees in arrears is a common practice in the traditional workforce and has benefits for household employment as well.

Will I know how much you'll take out of our bank account for our employee’s pay?

Yes, you will get an email on the Wednesday of a pay week with the amount we’ll take out of your bank account, or charge your credit card, for your employee’s pay and taxes and employer taxes. The actual debit for pay and taxes will occur on the Friday of a pay period.

Obtaining Workers’ Compensation Insurance

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Do I need workers' compensation insurance?

Workers’ compensation requirements vary by state. GTM Payroll has licensed insurance brokers on staff who can quote a policy for you. We’ll also manage your policy and handle any audits and notices. Your homeowner’s or renter’s insurance or an umbrella policy likely won’t cover an employee working in your home. Even if workers’ compensation isn’t required, voluntary coverage may still be a good idea.

Can you help me obtain a workers’ compensation insurance policy?

Absolutely! We have licensed insurance brokers on staff that can quote a policy for you and obtain coverage. We’ll also handle any notices and audits. It’s easier to have your workers’ compensation with us as we have access to your payroll reports to handle any audits or questions that may arise from the workers’ compensation board in your state. Workers’ compensation is required for household employers in many states. Even if it’s not required, it may be a good idea to obtain voluntary coverage.

You’ll have the option to add workers’ compensation coverage when you purchase a payroll and tax plan. Or you can add it at any time.

If workers’ compensation is required in your state, it should be in place before your employee’s first day of work.

Switching to GTM Payroll

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I started to do nanny taxes on my own but made mistakes. Can you fix my errors?

Yes, we can review your past nanny taxes and payroll and get everything squared away. There may still be fines and penalties if filings weren’t made on time.

I'm already paying an employee. How do I switch to GTM Payroll?

Once you’ve gone through the initial setup, just let us know how much you’ve paid your employee and we can take care of the taxes if you haven’t been withholding and/or remitting them. Depending on how long you’ve been paying your employee, there may be a small additional charge for this back tax work.

About GTM Payroll

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What are the advantages of using a payroll service?

We make payroll and taxes as simple and hands-off as possible, saving you time and relieving the stress of trying to do this all yourself. There’s peace of mind knowing your payroll and taxes are in the trusted hands of household employment experts and with a firm that has been handling payroll for more than 30 years. You have better things to do with your time than worrying about payroll and taxes!

Also, with GTM Payroll, your state and federal household employment taxes are filed on time, every time – 100% guaranteed. If you receive a notice from the IRS, or any other tax agency, based on a filing that GTM Payroll made, we’ll work with the agency on your behalf to resolve the issue. If we’re at fault, we’ll pay all the associated penalties and fines.

How do I contact GTM Payroll?

You can give us a call at (800) 929-9213 or email [email protected]. We also offer live chat through our website and employer dashboard.

Support is available Monday-Friday from 8:30 am – 8 pm ET.

* The information contained within these FAQs is designed to give the user general guidelines on the subject of household employment taxes. Tax laws can vary considerably for different taxpayers based on the circumstances and the state of residency. This information is not designed to serve as legal, accounting, or tax advice. GTM Payroll Services encourages you to consult with a competent tax advisor concerning specific matters before making any decisions. GTM does not accept any responsibility for positions taken by taxpayers for any interpretations of the information found within.

Talk to an Expert

 Questions about household tax or payroll?  We have the answers. Talk to a household employment expert today ​or schedule a complimentary, no-obligation phone consultation.

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