Calculating Withholdings and Payments for Nannyshare

Hello BPN,

I'd love to hear from another family participating in a nannyshare how they are navigating calculating withholdings and payments. Both families have EIN (primarly to use pre-tax FSA dependent care funds). We've contemplated alternating weeks, as her last employers did (but how does this look if we were to be audited?) or each paying our part each week (but then it looks like we are paying less than minimum wage).

I'd love to hear what people have done, however, only suggestions that are from a similar situation (where both families have EIN and want to pay taxes) are actually relevant. 

Thanks y'all,
Emily

Sep 28, 2019

Parent Replies

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RE:
Calculating Withholdings and Payments for Nannyshare (Sep 28, 2019)

Hi Emily, We are in a nanny share and use Poppins Payroll (www.poppinspayroll.com) to manage our nanny's payroll and make all the tax calculations.  Each family has an account ($39 a month) and each family enters our nanny's rate and hours through their online Poppins Payroll account.  Poppins makes all the calculations and does the direct deposits from each family into our nanny's account.  They also handle all the tax registrations, payments and filings.  It makes it super simple.

Oct 2, 2019
RE:
Calculating Withholdings and Payments for Nannyshare (Sep 28, 2019)

We were in a nanny share where both families reported earnings and withheld taxes and we used Homepay to run payroll and tax reporting. Each family paid half the hourly rate. Each family had their own EIN. There were no issues with minimum wage. Homepay was very helpful in making sure we complied with all applicable laws. 

Oct 2, 2019
RE:
Calculating Withholdings and Payments for Nannyshare (Sep 28, 2019)

Hi there. We are actually in a family share and heres how it works for us. Each family does have to pay separately or the family that does not report could get in trouble. The wages that each family pays is reported with the annual 1040 filing via Schedule H.  Regarding the minimum wage issue, as long as the nanny is earning over minimum wage an hour (even if split between two families) that complies with the law. Each family can just document how much she is earning per hour total and how much of that total each family is responsible for in a quick sentence or two document. I found this info helpful when navigating https://www.poppinspayroll.com/nanny-taxes-california

Oct 2, 2019