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What deductions do I get with a nanny?

14243 Views 20 Replies 7 Participants Last post by  ghostryder, 
A
Hi all,

In the past my nanny has acted as an independant contractor - she did her own taxes and we just paid her a flat rate.

In the new year I will have a new nanny who wants me to pay her taxes for her. I just went online and applied for a Business Number so that I can deduct her payroll taxes.

I want to know what expenses I can deduct. I will be providing her with breakfast and lunch, providing her with a Metropass every month, and we will be using my own house as the "daycare facility".

Can I deduct a proportion of heat, electricity, water, mortgage, property tax, and other household bills for running the business in my home? What about a proportion of my grocery bill? And the Metropass?

If anyone has any experience with this, I would love some help. I know that there are services that will figure this all out for a fee, but I would prefer to do it myself.

Thanks!
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Thansk for the replies. I wanted to save some money doing it myself, and all the payroll tables are available online, but maybe there is more to it than that?

I have already figured out that we will be paying $429.79 per week gross to give her $9.00 a hour, or $360 a week. I have never heard of paying extra for Workman's compensation. Can anyone verify? I just know what to pay for her federal and ontario taxes, plus CPP and EI.

Now I just have to figure out how to account for meals (she gets two at my house and the goverment says they are worth $2.55 each), and the Metropass. She is live-out though, so no accomodation is neccesary. Would I have to pay EXTRA tax on these? It seems like I would be paying tax twice then, no?
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Just for future posters who need this info - you do NOT have to pay into workman's compensation for a nanny. As an employer, you have to pay provincial and federal taxes, and CPP and EI (both the employees and employer portions). That's it.

Once you figure out what you need to pay, it is simply a matter of submitting your forms twice monthly to the bank so they can pass the payment onto the government.

For those who have a little bit of time to look into the matter and who can spend 10 minutes twice a month to go to the bank on the corner, you will save a ton of money NOT using nannytax.ca, and simply doing this simple task yourself.

It would help if the government websites were a little more self-explainitory about this, but c'est la vie.
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I applied for a business number from the government online, and received an information package in the mail. It confirmed that I was responsible to pay my employee's provincial and federal taxes, CPP, EI, and the employer portion of CPP and EI. I had another question so called the government of Canada and spoke to a tax representative, and they (again) confirmed this information.

For those who actually need this information to pay a nanny and who don't want to waste money paying for a service (like nannytax.ca) that can be done easily by yourself, you can access the payroll deductions calculator online at: https://apps.cra-arc.gc.ca/ebci/rhpd/handleResultsOptionsJan10.do . For anyone who has questions and wants to speak to someone you can call 1-800-959-5525.
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Private daycare is exempt from WSIB.
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Straight from the WSIB website:

1. Who Needs to Register

In most cases, you are required to register your company with the WSIB.

There are a few industries that do not have to register. These include:
  • Banks, trusts and insurance companies
  • Private health care practices (such as those of doctors and chiropractors)
  • Trade unions
  • Private day cares
  • Travel agencies
  • Clubs (such as health clubs)
  • Photographers
  • Barbers, hair salons, and shoe-shine stands
  • Taxidermists
  • Funeral directing and embalming

This is not a complete list as there are more industries that do not have to register. For more information, please contact your Customer Service Representative.

_____________________
The government is pretty good at squeezing every dime they can from us - had registering been a requirement, I am pretty sure they would have told me, especially after I called them specifically to ensure that all my bases were covered.

I also talked to a few parents in the neighborhood (even ones who use a tax service) and they do not pay Workman's comp for their nannies. Same for my grandparents who have eldercare - no workman's comp. I think that there are not a lot of hazards in a typical home that would require coverage. Workman's compensation seems to be more of a workplace concern.
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