No one likes paying taxes, and certainly many nannies don't. In fact, it is estimated that 80% to 90% of household employers may not be paying taxes. Nannygate has become the popular term for employers who don't pay their household employee's taxes. Nannygate is an epidemic in America in part due to the fact that nannies don't insist their employer's are tax compliant because they don't realize the benefits of being paid-on-the-books.Here are some of the benefits to being paid legally:
History of Employment: Payment history helps to develop credit which is needed when applying for any type of loan including a credit card, car, mortgage, and rent.
Unemployment Benefits: Employees who lose their jobs, through no fault of their own, are able to receive a portion of their salary after a lay-off. This benefit is essential in a difficult economy.Disability Benefits: If you have a non-work related illness or need to take maternity leave, you can collect Disability Insurance while you are unable to work.
Workers Compensation: Workers Compensations covers employees who become sick or injured while working. It is an insurance plan to help pay for necessary medical care.
Social Security and Medicare: Full retirement benefits for Social Security and general medical coverage via Medicare are put into an account where you can collect once you meet a certain age requirement to retire. The extra money when you retire, or in addition to paying your medical expenses, will be a benefit.
Breedlove and Associates
GTM Payroll Services