Employer Resources

How do I calculate mileage reimbursement?

• Gas and mileage reimbursement is not meant to be taxable compensation and it is best paid using the IRS mileage reimbursement rate.

• The IRS mileage reimbursement rate is 67 cents per mile, (as of 2024). This includes the cost of things like gasoline, oil, maintenance and wear-and-tear.

• Your employee should keep track of the miles driven using their own vehicle while on the clock (Ex: Transporting children, or running errands), not the miles driven during his or her commute.

• They can include these miles on a timesheet, shared spreadsheet, or a mileage tracking app, and report them weekly to be included in their payroll.

Are there other mileage reimbursement methods aside from the IRS mileage reimbursement rate?

Expense cards

• Some household employers provide a family credit or debit card to cover any pre-approved expenses their employees incur while on the job like buying groceries, paying admission to activities, taking the kids out to lunch, and more.

• You could allow the household employee to pay for their gas used on a family expense card. While this method may cover gas expenses, it does not consider the cost of the wear and tear they are placing on their car while driving on the job.

Stipends

• You may offer to give the employee a weekly gas stipend, if that is easier or makes more sense for the both of you. However, keep in mind that this is considered taxable income for the employee.

What expenses should the employee be reimbursed for?

• Household employees should be reimbursed for any expenses related to errands and activities requested of them while on the job (e.g., buying groceries, picking up dry cleaning, paying admission to activities, taking the kids out to lunch, etc.), provided that such expenses were authorized by you in advance.

• The family should pay for additional driving expenses like parking and tolls incurred while on the job.

• You may offer to pay for the cost of car washes if the employee is transporting children using their own vehicle (especially if your kids are young and eating in their car).

How will employees be reimbursed for expenses?

• A family can provide employees with “petty cash”, a family credit card, or reimburse them directly via Zelle, Venmo, or cash for pre-approved expenses incurred by the employee using their own money while on the job

How often should employees be reimbursed for expenses?

• Please keep in mind that employees would prefer to be reimbursed before the end of the day, if they are using their own money.

• A weekly system for reimbursements can work as well, as long as your employee doesn’t mind this method. (Even if you are paying your employee a generous wage, you never know what bills they may have due and when, or what supply of reserves they have set aside for expenses other than their own).

• It’s best to avoid a situation where your nanny or employee is feeling uncomfortable by having to remind you for payment

What are the benefits of paying through payroll?

• Paying legally through a payroll system is not only an industry best practice, but a legal requirement of the IRS as of 2024 if you pay over $2,700 to your employee per year. This includes all filing and payment of the employer share of taxes, including state and federal withholding taxes.

• Paying your employee “under the table” could trigger an IRS audit and result in fines and penalties.

• We refer all families to GTM Payroll and connect them with our contact there once they hire an employee.

• See our blog on the importance of paying via payroll.

Is my household employee an independent contractor?

• Household employees are not independent contractors and should never file a 1099 of any kind for their income. Nannies and other regular employees of a household should only file the typical tax forms associated with employment.

Federal Holidays

• During federal holidays your employee should either be given a paid day off, or, they should be paid time & a half to work on the day that it is observed.

• Typically, the following 8 days are paid holidays:

  • New Year's Day

  • Good Friday

  • Memorial Day

  • Independence Day

  • Labor Day

  • Thanksgiving Day

  • Christmas Eve

  • Christmas Day

• Regular raises are essential to encourage longevity and reduce turnover, as stagnation is the leading reason employees leave.

• Raises should account for both inflation and any added responsibilities since the employee started.

• Standard year-end bonuses typically range from 1-2 weeks of pay, with fully staffed households offering 5-10% of annual salary, sometimes equating to a month’s pay.

• Bonuses aren’t just about the dollar amount—creative perks such as additional paid time off, gym memberships, or access to family benefits are often highly valued.

• The best approach is to discuss with your employee what would be most meaningful to them, fostering a stronger working relationship.

For more information, please read our blog: Yearly Bonuses, Raises, and Holiday Pay

How often should I schedule performance reviews?

• We recommend scheduling performance reviews upon the first 30 days of employment. Going forward, the employee’s job performance should ideally be reviewed quarterly, if not every 6 months.

What are the benefits of performance reviews?

• Quarterly performance reviews are a good way to give your employee regular feedback on their job performance and hear from your employee about their level of job satisfaction. This is also an opportunity for the employee to bring up any questions.

• A yearly performance review is an opportunity for a household employee and family to the review the contract & set expectations for the upcoming year and make adjustments to the contract if needed.

• See here for our tips on employee performance reviews.

What if I am having a problem with my employee?

• If you are a household employer this may be your first time managing staff of your own, or maybe you feel frustrated by a particular situation with your nanny or household employee and aren’t sure how to approach it (without offending them).

• A great way to approach any miscommunication or conflict is to try to see the situation from your employee’s point of view. You can assure your employee that you know they are capable of this job and that you enjoy the value they bring to your family, while gently reminding them of the rules you have in place and the expectations you have of them.

• Create an action plan to resolve the problem and follow up after a specific time period.

How to avoid problems or miscommunications with my employee:

• We recommend scheduling ongoing performance reviews in order to promote open communication and a “growth mindset” between you and your staff member.

• If an issue arises and you feel the need to call a meeting with your employee, it will be less intimidating for them if they are accustomed to meeting with you for regular check-ins.

What are guaranteed hours?

• Guaranteed hours are the minimum amount your employee be paid for, even if you let your employee leave early one day or if you decide to go on vacation without your employee.

• While domestic employees are not offered a salary and instead are paid hourly, guaranteed hours are meant to protect employees so that they know they will have a set amount of take-home pay they can rely on.

• Guaranteed hours are the amount of hours the employee is committing their availability for your family, and in turn, your family promises to give the employee consistent, reliable pay for that amount.

• Families can’t ask their employee to “make up” hours they were guaranteed. This means if you decide to let your employee leave early on a Friday because you no longer need them, you shouldn’t ask your employee to return for a few extra hours the next day or be expected to work those hours the following week. This is called “banking hours” and according to Home Work Solutions, it is illegal to do.

• See here for more information on guaranteed hours

Are guaranteed hours a salary?

• Guaranteed hours are not a salary.

• Your employee should still be offered overtime pay if they are expected to work over 40 hours in a week.

• Variation to the guaranteed hours policy applies when an employee is sick or calls off of work

  • If your employee is sick or calls out of work their Paid Time Off (PTO) will come into play in the form of a paid vacation day, or personal/sick day.

  • If your employee has used all of their PTO for the year and informs you they are unable to come into work, those hours would be unpaid.

What if my family goes on frequent vacations without my employee?

• If you find yourself frequently using guaranteed hours to pay your employee for times your family is on holiday, you are welcome to request that your employee assists your family in other ways while you are gone. These duties should fall within their job description. For example, your full-time chef would likely not appreciate you asking them to scrub your toilet, but they may be more than happy to organize and restock your pantry and toss out expired food items.

• Your employee may be willing to assist with:

  • Running errands for you

  • Checking in on your home and pets

  • Restocking inventory

  • Household organizational tasks

• Be sure to give your employee ample heads up that you will be requesting their assistance while you are on vacation, so that your employee can ensure they are available to assist

Household employees must be paid overtime at 1.5 times the regular rate of pay after 40 hours of work in a calendar week (even if you offer guarantee hours).

• Household employees are always paid hourly, never salaried. While some families will quote a weekly pay in terms of a “salary”, in order to give them an idea of their weekly paycheck, the pay rate is negotiated in terms of gross hourly pay

What if overnight care causes me to run into overtime hours?

• See here for information on calculating overtime and compensation for occasional overnights

• Our blog on successful overnights also addresses how to compensate your employee for overnights

Is anyone exempt from overtime?

• Live-in employees are the only domestic staff exempt from overtime pay, according to the Fair Labor Standards Act

• Click here to read our blog about how families should pay their nanny for overnights with children.

• If you are out of town:

  • Ensure that you have discussed an emergency preparedness plan with your nanny and provided them with emergency contact information in case something happens.

  • You should grant your nanny access to the food and beverages in your home and provide them with petty cash or a credit card for purchasing groceries or meals for both themselves and the children.

• If you would like your employee to assist with pet care, we recommend outlining the details of the pet care responsibilities in the work agreement.

• If you plan on getting a new pet, your household employee would appreciate a heads up, (especially if they are going to be involved in caring for a pet requiring a lot of time and attention!)

• If you plan to go out of town, your employee should still be compensated according to their normal guaranteed hours.

• For house and pet sitting, it is typical to offer $75-$150 per night, depending on the level of care required, for the hours between 7 PM and 7 AM.

• During the daytime, instead of their usual duties, your employee can assist with tasks such as bringing in the mail, keeping pets company, walking and feeding pets, restocking groceries for your arrival, and overseeing any vendors, contractors, or housekeepers scheduled to visit the home.

What paperwork is required?

• When a household employer is hired, the proper forms for them to complete for or with you are typically a W-4, I-9, and W-10

• At tax time, household employees should receive a W-2 from you.

• As of 2023, If you pay a nanny or other household employee more than $2,600 per year you are required to take out taxes from your employee’s pay (this threshold was $2,400 in 2022 & can change from year to year).

What is my share of employer taxes?

• Household Employers are responsible for 50% of the required Social Security and Medicare taxes.

• According to the IRS.gov website, this amount is about 7.65%.

How much extra money will it cost me to pay my share of employer taxes?

• Here is a tool to help you calculate that cost.

Am I required to have workers compensation insurance?

• Workers compensation is meant to protect you from liability and the laws vary by state

• You should carry workers compensation if you employ an individual in your household for a total of 40 or more hours per week for a period of 13 or more weeks

• GTM Payroll can help you with workers compensation insurance

Can I decide when my employee takes vacation?

• Families and employers may try to align their vacations to fall during the same time period.

• Your work agreement will state the duration of your employee’s vacation that is of your family’s choosing and how much is the employee’s own choosing.

• If you are open to letting your employee choose all of their paid vacation days themselves they would greatly appreciate. However, it is understandable that it is not always possible.

What if my family goes on frequent vacations?

• If your family frequently travels (more than 2 weeks per year) you may ask your employee to try to align their vacation with yours.

• If you find yourself frequently using guaranteed hours to pay your employee for times your family is on holiday, you are welcome to request that your employee assists your family in other ways while you are gone. These duties should fall within their job description. For example, a full-time chef would likely not appreciate you asking them to scrub your toilet, but they may be more than happy to organize and restock your pantry and toss out expired food items.

• Your employee may be willing to assist with:

  • Running errands

  • Checking in on your home and pets

  • Restocking inventory

  • Household organizational tasks

  • Taking a vehicle in for service

  • Purchasing and wrapping gifts

• Be sure to give your employee ample heads up that you will be requesting their assistance while you are on vacation, so that your employee can ensure they are available to assist.

Can we take our nanny on vacation with us?

• Yes! If your nanny is willing to travel. See here for our blog post on best practices when bringing your nanny on vacation.

• For shifts over 7.5 hours, Household Employees are entitled to at least 20 minutes as an opportunity to rest and recharge or take a lunch break.

• For positions involving childcare, we recommend that nannies are given a 30 minute time period where they are allowed to sit down, rest, recharge, eat lunch, etc. Nannies are technically never “off” the clock, especially if they are the only adults at home to oversee the children. In households with parents working from home, some nannies can feel pressured to never be seen sitting, for fear that being seen taking a break will cause them to look like a bad employee.

• We encourage you to communicate to your nanny that they are allowed to eat their lunch, relax and take it easy when time allows, or sit on the couch during a child’s nap time, assuming that the children are being supervised and their safety isn’t compromised.

What if my employee is taking too many breaks?

• This is a great issue to address in a performance review!

• It could be possible that your employee is unsure of what other tasks they could be completing during that time, or they may have forgotten. Lists for “daily tasks” “weekly tasks” and “long-term projects” can be either written down on a piece of paper or put into a shared Google doc where your employee can make notes, ask clarifying questions, or track progress.

• Unused PTO for the year (vacation leaves voluntarily or is fired.and sick days) must be paid out to the employee.

• This rule applies even if your employee leaves voluntarily or is fired.

• Because we are not the employer, legally we cannot intervene with the candidate's employment once they are hired by a family. Please know that it is very common for your new hire to experience a "learning curve" as they get to know the way in which your household operates, which can take as long as 3 months. We ask that you provide proper training to your new employee, speak 1:1 with your new hire to address any concerns, and schedule regular meetings for feedback to encourage open communication for both parties. 

• Employment is at-will. Please inform us if you decide to terminate employment with your new hire and provide us with their date of termination. If the new hire was terminated within the allotted guarantee policy, we look into next steps for a replacement search, assuming practices were in line in accordance with our fees and policies for replacement services.