Welcome to the Introductory Issue of NannyPay News
Volume 1, Issue 1 (June 2004)
It is intended to provide household employers and NannyPay users with information about employment issues, tax tips, NannyPay software tips, and other items of interest in a brief, easy-to-read format.
If you have any comments or suggestions about our newsletter, please let us know by emailing us at: newsletter@essentia-soft.com. We look forward to your feedback.
How Well Do You Pay Your Nanny?
Knowing how much others pay their nannies is not just a matter of idle curiosity but may be important to insure that you are paying your employee within the range that other household employers pay in your geographical area. You want your employee to stay and you also want to make sure that you provide her with an incentive to stay. The International Nanny Association recently conducted a nanny survey, asking important questions about salary, job responsibilities, fringe benefits, and other hiring issues. The results should be of interest to any household employer. Click here to view how your pay compares with other household employers across the country. To see a full copy of the report in pdf format, click here.
Nanny Tax Tip — Are your withholding enough from your own salary to cover your Nanny Tax liabilities for the year?
Even though you report (and pay) your federal household employment tax liability (the “Nanny Tax”) by filing your Schedule H with your Form 1040 next year, you may nevertheless be subject to an estimated tax underpayment penalty if you are not withholding enough now from your own wages to cover your anticipated Nanny Tax liability. If you are employed, the easiest way to avoid the underpayment penalty is to ask your own employer to increase the amount of federal income tax withheld from your wages. To do this, complete a new Form W-4 for your employer as you did before, except show the additional amount you want withheld from each paycheck to cover your household employment taxes on line 6. IRS Publications 505 and 919 can provide you more information on making sure you have the right amount of taxes withheld.
Alternatively, you can start making estimated tax payments to cover your household employment taxes. Use Form 1040-ES to make these payments directly. You can pay your household employment taxes all at once, or quarterly throughout the year. See the form instructions for more details. If you own your own business, you can include your household employment taxes with your usual federal tax deposits during the year. Check with your business accountant for further information.
NannyPay Tip — How to Add A New Employee
You can use NannyPay for multiple employees by creating one file for each employee. To add a new employee, you must create a new file. There are two ways of doing this. You can take your old employee's file and create a new one by using the "Save As" command under the "File" menu. If you do that you won't have to re-enter your employer's information; however, you will have to substitute your old employee's settings with those for the new employee. You will also have to delete all the payroll transactions for that employee. The other way is to simply create a new file by using the "New" command under the File menu. You will then have to re-enter your employer information and enter your new employee settings, but you will not have to delete any payroll transactions.