Tag: taxes

Categories
For Parents

T4’s for Employed Nannies

 

Tax season is upon us once again, and it is important to remember that if you employed a nanny in 2022, their T4 slip is due on February 28, 2023. Filing taxes can be a daunting task, but don’t worry, we have some tips to help you get started.

First, you need to file a T4 Return for each nanny that you employed in 2022. This return should include the nanny’s Social Insurance Number, current address, gross income, and the total amounts of Canada Pension Plan, Employment Insurance, Income Tax deducted, and any benefits you have paid on behalf of your nanny.

Next, you need to file a T4 Summary Return for yourself as the employer. This return should include the number of T4 slips you completed, summarized totals of the amounts on each T4 slip, and summarized totals of the amounts on your remittances.

If you remitted a source deduction in 2021, the Canada Revenue Agency (CRA) will have sent you a Web Access Code. This code is essential for filing your T4 Return and T4 Summary Return online. If you did not receive this code, you can contact the CRA for assistance.

You can file your T4 and T4 Summary Returns either through a traditional paper method, Electronic Media (CD, DVD), or on the internet. Filing online is often the quickest and most convenient option, but choose the method that works best for you.

Finally, it is important to remember that the penalty for failing to distribute T4 slips to your employee or failing to file your T4 and T4 Summary Return by February 28, 2023 can be significant. The penalty starts at $100 even if you are one day late! Additional penalties and interest could also be charged, so be sure to file your returns on time.

The Nanny Solution partners with Livelihood Payroll to assist with our client’s payroll needs. If you are interested in their assistance with payroll, please visit: https://www.livelihoodpay.com/

Looking to hire a nanny? Book a consultation with one of our placement managers.

Categories
For Nannies For Parents

Gas Reimbursement for 2023

Happy New Year! We hope the holiday season brought you joy and some time to rest. 

With each new year, change is inevitable. 

If you have a nanny that drives their own vehicle for work purposes or are a nanny that drives as part of your job, please note that the CRA has raised the government reimbursement rate. 

As of January 1st, 2023, the limit on the deduction of tax-exempt allowances paid by employers to employees who use their personal vehicle for business purposes in the provinces will increase by seven cents to 68 cents per kilometre for the first 5,000 kilometres driven, and to 62 cents for each additional kilometre.

It is important to track kilometres driven for work purposes and submit them to your employer at least once per month. There are some great apps available such as MileIQ, Everlance, Triplog or you can use a good old-fashioned notebook you store in your glovebox to track your kilometres.

Remember, that unless you have an agreement set up, it is the responsibility of the employee to get themselves to and from work and mileage shouldn’t be tracked unless you are driving for work purposes.

All the best for a safe and healthy 2023!

The Nanny Solution Team

 

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Categories
For Nannies

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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