Is a nanny considered an employee or an independent contractor?

Learn about: Is a nanny considered an employee or an independent contractor? from Christine Neilson,...
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Is a nanny considered an employee or an independent contractor?

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Your nanny/babysitter is an employee/independent contractor depending on how they work with you. An employee is someone for whom you control the work, how the work is done, the hours they work. They can work full time, part time, be paid hourly, weekly, or by job, whereas an independent contractor, they control how they work. They set their own hours, usually provide their own tools, and most of the time have other clients that they provide the same services for. With an independent contractor, the end of the year you are going to issue them a 1099 form that is required by law. This form states how much you paid them in that year. For an employee, the requirement is that you have to provide a W2 form showing what you paid them and the taxes deducted. The taxes that have to be deducted are Medicare, Social Security and unemployment. In addition to salary, you are also going to incur 10 to 12% additional costs in payroll taxes. It is a legal requirement those taxes are paid. So to make sure you in compliance, you must pay them and also insure that the employee is entitled to benefits such as social security and unemployment.

Learn about: Is a nanny considered an employee or an independent contractor? from Christine Neilson,...

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Christine Neilson

Financial Advisor

Christine Neilson is from London, England and moved to the United States in 1991. She has a BA with honors in Business Studies with an emphasis in  Finance from South Bank University in London. Prior to moving to the United States, Christine worked in the computer industry for seven years as an operator and programmer before becoming a Surveyor specializing in commercial real estate appraisal, acquisition and development.  Having recently obtained her California and Washington real estate licenses Christine is merging her extensive financial advisory and real estate experience to provide unique expertise to clients.

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