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Tax, Payroll & Employer Considerations

Tax Considerations

Please be aware that when you hire a Nanny through Town + Country, the candidate is considered your household employee, not an independent contractor or an employee of the agency. As stated in your contract with Town + Country, you are the “employer of record.” While Town + Country is not directly involved in any tax filings or reporting, we are knowledgeable about the subject and happy to answer any questions you may have. Important things to consider:

  • Under California law, if you pay any number of temporary candidates or other household employees more than $750 in a tax quarter, you are required to register as an employer and pay certain state employer taxes.
  • Additional California employer taxes are due when that amount exceeds $1000 in a tax quarter.
  • In addition, when you pay any individual candidate more that $2200 in a year, you are required also to pay certain federal employer taxes. 
  • Keep in mind that you cannot claim any tax or flexible spending credits at tax time unless you have paid the candidate legally, paying all required employer taxes, at the time of the assignment.

Further information about household payroll taxes is available from our partner HomePay (formerly Breedlove & Associates) at http://www.myhomepay.com.

Payroll Considerations

Always reimburse the candidate for any expenses incurred on your behalf, including any miles driven while on the job (not including commute time to your home). The mileage reimbursement rate is set annually by the IRS and can be found at https://www.irs.gov/tax-professionals/standard-mileage-rates. 

Employer Considerations

As noted, Town + Country is not the employer of the candidate we referred to you. As her employer you have employer responsibilities, including employment taxes and workers’ compensation, under state and federal law. In particular, California law requires employers to have workers’ compensation insurance. As a starting point, we suggest that you contact your homeowners insurance carrier or agent to understand what coverage you currently have or may need. For additional information contact your local Employment Development Department and the Internal Revenue Service.