One of the benefits of being an entrepreneur is that you are your own boss. Theoretically that means you can work whatever hours you choose. However, anyone who has started a business knows that you end up spending way more time on your own company than someone else’s.
You’re not responsible for one job, but every job. Sometimes that means managing employees, other times it means single-handedly running sales, accounting, payroll, HR and IT.
Being home at 5:30 every night is not always a possibility.
Meanwhile, our children’s lives seem to be getting busier too – the soccer games, playdates and school functions seem never-ending. And is there a parent among us who hasn’t had to scramble to cover an unexpected sickness, or a school holiday you don’t have the luxury of taking at work?
That’s why the help of a nanny at home is often vital.
There are more than 1.3 million nannies working in the United States, according to the Bureau of Labor Statistics (BLS). That number is expected to grow by 14 percent through 2022, slightly more than the average occupation’s growth rate of 11 percent.
Small business owners, perhaps more than others, are prime candidates to employ a nanny, because there are so many responsibilities that come with being an entrepreneur. You often need the support.
Paying Your Nanny
The median yearly pay, according to the BLS, for a nanny or childcare worker is roughly $19,500. Given that the threshold for paying nanny taxes is just $1,900, it tells you how much we’ve come to rely on these caretakers to watch after our children.
It’s also our responsibility to pay these important employees of ours correctly – just like it is to pay the employees who work for your business.
This means verifying that they’re eligible to work in the U.S. and filling out a Form I-9, as well as paying your portion of nanny payroll taxes, which include deducting and matching Social Security and Medicare taxes. The current rates are 6.2 percent for Social Security and 1.45 percent for Medicare.
Unless your nanny is a grandparent, spouse or child under 21, you’ll have to pay federal unemployment taxes (FUTA) as well, if your nanny makes more than $1,000 in a quarter. And you’ll pay 6 percent on your nanny’s first $7,000 in wages.
Preparing W-2s and, as a business owner, the Form 941 quarterly, are also part of the nanny payroll process.
Consider that it may be easier to pay a marginal cost for a nanny payroll service to handle all this for you.
Small Business Owners Don’t Have Much Backup
Based on a recent survey SurePayroll did of thousands of small business customers nationwide, 76 percent offer their employees 10 or less vacation days.
Why so few?
It’s often because with a staff of five or three or even one, there isn’t a lot of backup when people are missing. As the owner, you often have to step in and fill someone else’s role.
Sometimes you need someone to hold down the fort for you at home – making sure your children get to and from school, are fed and safe. For some entrepreneurial families, this is much more a necessity than a luxury.