Paying Nanny Tax in Ontario

Published: 08th February 2011
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Paying Nanny Tax in Ontario

Paying your Nanny Tax is not only critical, but is the law in Ontario as in all of Canada. However, many people unfortunately overlook the filing of this tax. It leads to many homes keeping their nannies in an illegal status by paying them in cash etc. There is no need for this attitude. The important thing is to inform yourself of the nanny tax rules and regulations in Ontario and then file appropriately or find a professional that can prepare and file the material for you.

The Importance of Paying Nanny Tax in Ontario

The failure to file proper nanny tax material in Ontario is mainly due to the perception that people who hire a nanny do not consider themselves "real" employers and therefore do not sense a requirement to pay the nanny tax. Therefore, many people miss the real tax consequences and filing liabilities of hiring someone to live and work at home. It is important to realize that when one hires a nanny, be it in Ontario or anywhere else, one becomes a very real employer as defined by the tax rules and regulations.

Nanny tax and Other Filing Requirements in Ontario

Therefore, in Ontario, a number of federal and provincial income taxes, Employment Insurance, CPP (Canadian Pension Plan), and Workplace Safety and Insurance Board premiums must be paid for the Nanny, who is an employee protected under Canada’s live-in caregiver program established in 1992. Under the program, nannies’ contracts must clearly mention hours and wages with a deduction for room and board. Sick days and vacation days must be clearly outlined.

At Tax4Nanny we are tax professionals who specifically specialize in Nanny Tax preparation and filings. We will take care of the entire Ontario Nanny Tax filings required for your specific situation.

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