For Parents

From Gross to Net: A Parent’s Guide to Nanny Payroll in Canada


At The Nanny Solution, we specialize in helping families hire professional, educated, and nurturing nannies. We believe that families should know and understand the financial implications of hiring a nanny, and their responsibilities as employers before beginning their nanny search.

In this post, we’re outlining these implications and responsibilities to help you make the best informed decision for your family.

Advertised Nanny Hourly Rates: Gross or Net?

Typically, when a nanny position is advertised at $30 per hour, for example, this is the gross amount. This is the nanny’s rate before any deductions, including taxes, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums. 

As an employer, you’re responsible for withholding these amounts from the nanny’s pay and remitting them to the Canada Revenue Agency (CRA).

Your Responsibilities as an Employer

When you hire a Nanny, you become their employer. You enter into a formal employment relationship, which has specific responsibilities:

  • Payroll Taxes: You must deduct income tax, CPP contributions, and EI premiums from your nanny’s wages.
  • Having an Employment Agreement: You should have a clear employment agreement outlining wages, hours, duties, and any benefits (such as paid vacation and sick days). The agreement (or contract) benefits both you as the employer and the Nanny as your employee.
  • Workplace Insurance: Depending on your province, you may need to enroll in a workplace safety insurance program.


Resources for Employers

You may find the following resources valuable:

  • Canada Revenue Agency (CRA): The CRA’s website offers detailed information on employer obligations for household employees, including how to register as an employer, calculate deductions, and submit payments.
  • Service Canada: Provides information on EI premiums and benefits, including special considerations for insurable employment in a private household.
  • Provincial Employment Standards: Each province has specific regulations and standards for employment, including minimum wage, working hours, and termination procedures. It’s crucial to familiarize yourself with these to ensure compliance.

At The Nanny Solution, we understand that navigating the financial aspects of hiring a nanny can be complex. Our role as a Nanny agency extends beyond matching families with the perfect childcare professionals; we aim to support and guide you through every step of the nanny employment process.

While we do not directly handle the payroll or tax aspects of the nanny-employer relationship, we recommend Livelihood Payroll. They can simplify the nanny payroll process, making sure you meet all legal and financial obligations.

Investing in a professional nanny is not just a financial decision but a commitment to your child’s well-being and development. Understanding your responsibilities as a nanny employer is important in establishing a transparent, fair, and legal employment relationship. By doing this, you ensure a positive and productive working environment for your nanny, which ultimately benefits your family.

For more information about hiring a Nanny and ensuring you meet all legal and financial obligations, visit The Nanny Solution. Our team is dedicated to supporting you through every aspect of hiring and employing a professional Nanny, ensuring a smooth, fulfilling experience for both your family and your nanny.

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