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Hiring a Nanny? How to legally pay a nanny in Canada

When you hire a nanny in Canada, you become their employer and that is a huge responsibility with a steep learning curve. Employees are dependent on their employers to be able to pay their bills and put food on the table for their family, as well as to have future pensions, E.I., apply for loans, etc. As such, it is crucial that you understand your responsibility as an employer. The information below is very general. Please refer to the Employment Standards in your province to get the most recent information.

Payslips, pay frequency, deductions

You must provide set pay periods, wage statements, and withhold and remit deductions to Revenue Canada. The most common pay periods bare every 2nd Friday, or the 15th and last day of the month). We recommend hiring a payroll company; they are the experts in the field and can save you a lot of time, stress, and money.

Vacation pay

Nannies accrue vacation pay and are entitled to paid time off. It does not matter if they are short-term or permanent, full-time or part-time.

Sick days

As an employer, you will absolutely have to deal with a sick nanny at some point. Try to be as understanding and accommodating as possible, and have a plan B for childcare in mind.

Statutory holidays

Nannies may or may not be entitled to have a paid day off on statutory holidays. This is dependent on the rules laid out by Employment Standards in your province.

Overtime

Overtime rates may apply, dependent on your provincial employment rules. It may be a daily overtime rate or a weekly overtime rate.

Quitting or letting your nanny go

Employees can quit their job at any time. Giving notice is the norm but it is not a requirement. You, as the employer, can terminate the nanny’s employment; however, you must provide them with the required notice or pay in lieu of notice.

When employment ends

Regardless of whether the employee quit or is let go, the employer must pay their outstanding wages, including any outstanding vacation pay within a specific time period. No other deductions can be taken off the paycheque (i.e. you can’t deduct pay because too much vacation was taken). A record of employment (ROE) must be issued once employment has ended and filed with Service Canada. It must be issued within a specific number of days.

Tax statements

As the employer, you must issue the nanny a T4 slip before the tax deadline each year.

Employment Standards in each province have call centres and very informative websites.

Websites:
Employment Standards of Ontario
Employment Standards of Alberta
Employment Standards of BC
Service Canada

The key points above are not simply recommendations. The Canada Revenue Agency requires you to hire your nanny as an employee. Paying under the table is illegal and hiring as a contractor is not permitted. We advise all families who are in the process of hiring a nanny to familiarize themselves with the Employment Standards in their province and have a thorough understanding of the responsibilities that come along with being an employer.

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