{"id":14707,"date":"2018-02-02T12:50:28","date_gmt":"2018-02-02T17:50:28","guid":{"rendered":"https:\/\/gtm.com\/household\/?p=14707"},"modified":"2024-08-26T12:28:41","modified_gmt":"2024-08-26T16:28:41","slug":"6-ways-nanny-benefits-legal-pay","status":"publish","type":"post","link":"https:\/\/gtm.com\/household\/6-ways-nanny-benefits-legal-pay\/","title":{"rendered":"Paying “On the Books:” How Your Nanny Benefits from Legal Pay"},"content":{"rendered":"
\"Your

Your nanny benefits in a number of ways when they’re paid “on the books” and taxes are withheld from their pay.<\/p><\/div>\n

We often discuss how families benefit from legally paying their household help<\/a> and what can go wrong if they don\u2019t<\/a>. A nanny benefits as well from being paid legally even though they may see a little less in their paychecks.<\/p>\n

If you\u2019re hiring or looking to transition a current employee to \u201con the books\u201d and she doesn\u2019t want taxes taken out of her pay, explain these nanny benefits and protections that they\u2019ll enjoy.<\/p>\n

Here are the six major benefits of paying your nanny legally:<\/strong><\/em><\/p>\n

1. Verifiable income<\/h2>\n

If your employee applies for a car loan, student loan, mortgage or even a credit card, they\u2019ll need to show that they can pay monthly installments. Being paid legally provides a verifiable income to show the lending institution. If their pay is not documented, they have no way to show that they have a job that brings in a steady income.<\/p>\n

2. Legal employment history<\/h2>\n

Having a work history is also important when applying for a loan, credit, or their next job. Being paid \u201con the books\u201d creates a legal employment history that banks and lending institutions as well as future employers can verify.<\/p>\n

3. Unemployment benefits<\/h2>\n

As an employer paying your workers legally, you are required to pay unemployment taxes. This is an employer-only tax yet it\u2019s your employee who benefits. If your nanny loses her job, through no fault of her own, unemployment benefits will partially replace their lost wages for up to six weeks while they look for a new job. Amicable splits are common in household employment and this is a benefit your nanny will want if they find themselves without a job.<\/p>\n

4. Social Security and Medicare benefits<\/h2>\n

Social Security and Medicare taxes will be taken out of your nanny\u2019s pay. This money is set aside to help pay for their living and medical expenses when they retire. As an employer, you\u2019ll also pay into their Social Security and Medicare. If your nanny is paid \u201cunder the table,\u201d they won\u2019t receive these benefits. As a result, they may need to continue working past retirement age.<\/p>\n

5. Health care subsidy<\/h2>\n

Under the Affordable Care Act (ACA), a health insurance marketplace has been created to help uninsured people find coverage. If your nanny wants to purchase a policy through the marketplace, they could qualify for a subsidy and cut the costs of their insurance. For example, a nanny who makes $40,000 and lives on her own in New York City would save 38 percent on their health insurance premiums<\/a>. Of course, this is only available to them if they are paid legally.<\/p>\n

6. Employment benefits<\/h2>\n

As an employer, you may want to provide benefits to your workers to help retain your best employees. A 401k retirement plan<\/a> and health insurance plans<\/a> that may be cheaper and provide better coverage than the ACA marketplace are a couple of perks that would set you apart from other employers. But your nanny will be need to paid legally in order to take advantage of these benefits.<\/p>\n

The benefits and protections of being paid legally far outweigh the small amount of money that will be taken out of their pay each week.<\/p>\n","protected":false},"excerpt":{"rendered":"

Your nanny benefits in a number of ways and gains protections when being paid legally. It far outweighs the small amount of money that will be taken out of their pay in taxes each week.<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[82,75],"tags":[175,176,89,54,58],"class_list":["post-14707","post","type-post","status-publish","format-standard","hentry","category-employee-benefits","category-household-payroll-taxes","tag-health-insurance","tag-legal-pay","tag-medicare","tag-social-security","tag-unemployment"],"yoast_head":"\n6 Ways Your Nanny Benefits from Legal Pay - GTM Payroll<\/title>\n<meta name=\"description\" content=\"Your nanny benefits in a number of ways and gains protections when being paid legally. 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