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Nanny Pay Stub Guide: Creating Accurate And Legal Pay Stubs
Employers are legally required to provide their nannies with a detailed pay stub for each pay period in most states. With a nanny pay stub, they can simplify their tax filing, ensure transparency and protect both the nanny and their employer.
This guide will walk you through everything you need to know. You'll understand the legal obligations and components to create a pay stub for nannies. We'll explain the nanny payroll process, taxes that need to be withheld and managing household payroll.
What Is a Nanny Pay Stub and Why Is It Required?
A nanny helps to manage their employer's home, especially when the kids need attention, and the parents are busy. A pay stub is also known as an earnings statement. It is a document that breaks down an employee's total pay and wages. For your nanny, their pay stub needs to include their hours worked, pay rate, gross and net pay. You also have to include all taxes withheld for a specific pay period.
As a household employer, you need to provide your nanny with their pay stubs. In the U.S., household employees, especially nannies, are required to be given their pay stubs. It is mandated by law in 41 states. The only states that don't require nanny pay stubs to be provided are:
Alabama
Arkansas
Florida
Georgia
Louisiana
Mississippi
Ohio
South Dakota
Tennessee
Even if you live in one of these states, it's still a good idea to issue your nanny their pay stubs.
Read more: What Does A 1099 Pay Stub Look Like?
Why Do You Have to Provide Pay Stubs to Household Employee Nannies?
Reasons to provide pay stubs to household employee nannies include:
Legal Compliance: It fulfills state labor laws and federal tax obligations. This helps you avoid penalties.
Transparency: Giving nannies their pay stubs helps you build trust. It shows your nanny exactly how their paycheck is usually calculated.
Proof of Income: They could use a pay stub as proof of income. They need these documents to rent apartments, secure loans, or apply for credit.
Filing Taxes: Accurate stubs make it easy to file taxes correctly at year-end. They can complete necessary tax forms like the W-2.
Dispute Resolution: It serves as an official record. This is in case your nanny has any questions about their payments or their hours worked.
Fundamentally, a nanny is a household employee, not an independent contractor. Therefore, this means that they're W2 employees, not 1099 freelancers or contractors. This is because you control their schedule, work location, and duties.
Essential Information Every Nanny Pay Stub Must Include
Your nanny's pay stub must contain all the necessary information. It needs to be clear and compliant. Here is the breakdown of what every section should include:
Employer & Employee Details
Include your full legal name and address as the household employer. You may also need to add your Employer Identification Number (EIN). Then, list your nanny's full name and address as the household employee.
Pay Period & Pay Date
Clearly state the timeframe that their pay covers. Then, list the "Pay Date", which is the actual day that you issue the paycheck.
Hours Worked and Employee Wages
On their pay stub, you need to itemize their:
Regular hours worked and the hourly rate.
Overtime hours and the overtime rate. Overtime hours are typically any hours that are over 40 in a workweek; overtime rates are usually 1.5 times the regular rate.
Any other earnings, like bonuses or paid sick time.
All of these give your total gross pay.
Deductions and Withholdings
This itemized list shows where different parts of your total gross pay are. It refers to your deductions and taxes withheld. They include:
Federal Income Tax
Social Security Tax
Medicare Tax
State Income Tax
State Unemployment Insurance or other state and local taxes
Any applicable deductions
Net Pay
Your net pay or take-home pay refers to the amount you get after all deductions have been removed.
Year-to-Date (YTD) Totals
Your YTD totals track your total earnings, taxes withheld, and net pay from the beginning of the calendar year.
Also check: Create a W2 Form now
Understanding Nanny Taxes
Nanny taxes refer to the taxes an employer pays to hire a nanny. It can also be a household employee who works in other people's homes. As an employer, you have control over what gets done and how it's getting done. Here's what you are responsible for:
Federal Taxes
They include:
Social Security & Medicare (FICA): You must withhold 7.65% from your nanny's employee's wages. 6.2% goes for Social Security and 1.45% for Medicare. You then need to match this amount as the employer. Then, send the combined 15.3% to the IRS.
Federal Income Tax: You withhold federal income tax from each paycheck. It should be based on the allowances your nanny claims on their Form W-4. The IRS Publication 15-T provides the withholding tables.
Federal Unemployment Tax (FUTA): You pay federal unemployment tax separately. It is 0.6% of the first $7,000 of wages and is not deducted from the nanny's pay.
State Taxes:
State Income Tax: You need to withhold according to your state's tax rates and the nanny's state withholding form.
State Unemployment Insurance (SUI): You pay state unemployment tax to your state. The rates may vary.
Read more: Fwt On Paystub: Decoding Federal Withholding Tax
How To Create a Nanny Pay Stub
There are three ways you can use to generate a nanny pay stub:
Manual Creation
You can create your pay stub by using a nanny pay stub template in a word processor or spreadsheet. While this is low-cost, this method is quite time-consuming. It's easy to make mistakes and keep up.
Nanny Payroll Service
A nanny pay stub payroll software handles all calculations, tax withholdings, payments, and tax forms. Nanny payroll services have to outsource your household payroll to create pay stubs.
Using a Digital Pay Stub Generator
This is ideal for most families with one employee. You can use a pay stub generator to create a nanny pay stub. It automates the payroll process entirely.
Using a Pay Stub Template To Create Your Nanny Pay Stub:
First, you need to choose a paystub template, then:
Input employer details and household employee details.
Enter the pay period dates and payment information. This includes your hours worked, hourly rate, and any overtime.
A pay stub generator will automatically calculate the total gross pay. It'll apply the correct federal taxes, like Social Security and Medicare taxes, and state and local taxes. It then reflects your total net pay. We'll then update their year-to-date totals automatically.
Preview, then download or email the pay stubs.
This method saves time, reduces errors, and creates accurate pay stubs instantly. You'll be able to access digital pay stubs at a reduced cost. You can then manage the entire process in minutes each pay period.
Also check: Choose from our multiple pay stub templates.
Nanny Payroll Services vs Nanny Pay Stub Template Generator
Choosing between a full-service provider and a nanny pay stub template generator depends on your needs:
Nanny Household Payroll Services
Using a payroll service operates on a completely hands-off system. They usually guarantee compliance, handle all tax deposits and filings. They also provide payroll records and year-end tax forms. Typically, it's ideal for those who don't want to do any paperwork.
The downside is that using a payroll service costs more; it's expensive. You have to pay a monthly fee. Sometimes, it even takes per-payroll fees, and this adds to the cost of employing your nanny.
Digital Pay Stubs Generator
Using a pay stub generator is usually cost-effective. Usually, you may need to pay a low one-time fee per stub. It is fast and still ensures that you create compliant digital pay stubs. It is ideal for families who want to save time while creating accurate pay stubs.
While using a pay stub generator, however, you're still responsible for making your own tax payments on time and filing quarterly and annual forms. It requires you to operate it fully. It's not the same as using a full payroll service. For many household employers, especially those with just one employee, you can use a generator. It is the most practical and efficient choice.
Read more: What If Your Employer Doesn't Give You A Pay Stub?
Final Thoughts
For employers, providing a detailed nanny pay stub is a major part of being a responsible household employer. It ensures fairness, fulfills legal obligations, and builds a professional working relationship. You need to make sure you, however, keep the copies of every pay stub you issue. Also, keep logs of every hour worked and include their dates. Records of all payments made and keeps copies of the nanny's tax forms. Ultimately, this keeps the whole process organized.
Our pay stub maker makes it easy to create quick pay stubs. In just a few steps, you can make accurate pay stubs. They explain and break down all your earnings and deductions. Visit us today!
