I think a simple answer would be that nannies can make more money when paid under the table. Especially in the current economy, where parents are wanting to pay less and there are fewer jobs to be had, sometimes people just have to take what they can get.
This is the way I understand it to work. If I'm wrong, please correct me.
If a family offers $400 per week before taxes, then both the nanny and the family are paying about 7% of that to the government. So the nanny gets that percentage taken off her pay, and the family pays that in addition to the $400. So If the nanny is paid under the table, the family has to pay less and the nanny gets to keep the full amount. Sometimes, families can be convinced to pay more per week, say $450 instead of $400, since they're not having to pay the taxes.
When I interviewed for my current job I informed the family that I would like to be paid on the books. DB told me that several other nannies they interviewed (who asked for $200 less per week than I did) said that they preferred to be paid under the table because it would cost the employer less. He seemed to like that idea, but I stayed firm and I'm paid my asking salary, on the books.
I'm a 23 year old nanny with a Bachelors in something completely unrelated to childcare. I was a nanny in college and was always paid under the table. This is a temporary situation for me and I plan on going to grad school/pursue a career. Right now I am content to be paid under the table (asked to be paid that way) because I need the extra money.
I insist on being paid on the books. It can be very hard to find a job with a family willing to pay on the books, because they don't want to pay the employer's share. Agencies are required to tell clients that they are legally required to pay taxes, but many employers will still try to negotiate with the nanny to accept the job off the books. It seems the only employers willing to pay on the books, at least here in NYC, are the ones who can't afford to be caught breaking the law, lawyers, politicians, and celebs.
When you hire a person to work in YOUR home, you have many liabilities that you must handle. If a nanny injures herself on your property because it was deemed unsafe, then she could sue your butt off in court. If a nanny becomes disabled while on the job because her working conditions were "unsafe" then you can get in trouble. Bigger companies usually have liability insurance to cover all this, however homeowners rarely can afford this. It just makes it easier for everyone involved if the nanny gets paid under the table. It is a win-win situation for many.
Parents don't want to deal with the "nanny tax" paperwork, even though it can only benefit them. In CA (northern, not southern), people don't value in-home domestic childcare as much as in other parts of the country (and the world) and many of my interviews have been disappointing in the area of requesting payment on the books. Parents believe a nanny is just doing this for fun, I guess. That's been my experience...
Nannies who conspire with their employers to cheat the IRS do so mainly because they are too short-sighted to see the benefits of being paid legally.
The prime benefit is the access to unemployment when they are fired. Secondary benefits include being easily able to establish a credit history with proof of income.
Is paying taxes fun? Nope, but it's the correct thing to do.
I would be thrilled if the feds ever enacted the Fair Tax, which would eliminate the chance for people to cheat the IRS. Doubt that will happen, but with the current administration staying in power and focused on taxing all the "rich people" to death, I bet there might be more intense enforcement of "nanny tax" laws. If that does happen, I hope the nannies who choose to cheat get hit with tax penalties as well.
Tales, I second your plea for enforcement of the tax laws. I think this has to start with the employers, however. Nannies can only work off the books if employers are willing to break the law and hire them.
To be clear, you cannot collect unemployment if you are fired.
In addition to unemployment and worker's comp. a huge benefit of working on the books is social security, which is 15% of salary. Half comes out of the nanny's salary, the other 7.5% comes out of the employer's pocket. That is money she is losing if she is not on the books. Look at it like this, you put 7.5% into savings for your old age, and the employer matches it.
For those who choose to work off the books, How much are you saving towards retirement? How big a cushion do you have if you lose your job and don't find a new one for some time? If you have a serious injury on the job, can't work and have medical expenses, will you be OK financially? Think about it.
I suppose the simple answer is because they can. I work on the books now, but have worked under the table in the past. I can't be too critical of those who work off the table. I've done it in the past and had my reasons. When I chose to work under the table I desperately needed a job, and that was the only job that was available to me.
8 months down the road I was able to find work being paid on the books.
I prefer to be paid on the books. I've reached a point in my life where having a record of employment is extremely important. I need for school, for housing, for a car and the list goes on and on. I have to say it was nice to know when I was laid off my last job that I had the option of filing unemployment if I was unable to find a job quickly. It's also a way to save for the future. Though I have zero faith in social security at least for my generation.
Simple answer: because they like the extra money and don't understand what taxes are for. If they educated themselves they would feel a moral responsibility as a citizen to pay taxes.
In some states there is such a thing as being fired "at will- no fault of your own" and under this circumstance one can collect unemployment. Many people who collect unemployment ($1800 maximum/ month, often much less) work under the table while collecting in order to boost their income, as any income on the books counts against unemployment income.
I disagree that such people do not understand their moral responsibility. When someone goes from making a living to living off of $1800 a month, their moral responsibility is to do their best not to get evicted, to continue to feed their kids and maintain their cars, pay for school pictures and field trips. Working under the table is a smart decision in these situations. Judging people for these decisions and wishing penalties on them is ridiculously mean spirited. Workers only collect unemployment because of their years of paying into the system with their previous above table jobs. They've fulfilled their "moral" duties plenty.
As much as I think 'Penaltywishersgohome' is wrong, I can certainly understand their position. I can also empathize with someone who, after losing a job that pays the bills, ends up losing their shirt when they find themselves with no income. So collecting a measly $1800/month from unemployment, and getting a job that pays under the table, who then gives a crap about morality? Especially when you have extenuating circumstances like being a single mom with mouths to feed.
How can people equate paying taxes to morality? You're more moral because you place taxes ahead of shelter and food? While American business is subsidized by your taxes and pays zero? And you blame struggling citizens for working under the table? Hilarious!
Sometimes one has to do what one has to do to survive and feed his or her family.
The way the government has things set up, if a person received food stamps, unemployment benefits, AFDC, Disability, etc....even a small amount of money can wreck havoc on things. It's like people want to take one step forward and instead they are taking two steps back because whatever money they earn "on-the-books" penalizes them overall. I do not think people who work under the table are bad, they just are trying to survive like everyone else.
I really feel for those that are single parents as well as those that support older parents. Every little penny counts and could mean the difference between bread in the cupboard and glasses to see the board in class.
I would have a problem if someone were living like a king while working off the books, but I have never witnessed this. It's just regular folks who are trying to put clothes on their children's backs and X-mas presents from the 99cents store under the tree.
I was fired & I collected $1,200/month unemployment for 18 months in 2002-2004 in California. I also got my job back and received back bay to make up what I had lost out on. I worked six more months & then quit. I was only making $20 an hour straight time. It wasn't worth it to me to work anymore. I make more staying home and occcasionally working on my .com. Oh also when I was collecting, I was also working under the table. My moral obligation was to myself and my child. I was and still am unconcerned with the governments needs. My familys needs will always trump everyone elses. Always. That's what mothers do. They look out for the survival of their own first and foremost.
Penalty wishers, the circumstances you describe are unique and not what most of us were referring. When I said poeple who work under the table don't understand moral responsibility, I'm talking about those who refuse to pay taxes.
Paying taxes sucks, I know. I am trying to get approved for Social Security Disability and I can't because I worked off the books for 10 years. I do not have enough "credits." Work on the books.
Doing PT babysitting while collecting unemployment and looking for a new job is a different issue. If someone is collecting unemployment, that means the job they lost was on the books. The big debate is about nannies working full time and neither they nor their employers paying taxes.
Wonder Woman, thats bullshit. Get yourself a lawyer if you don't already have one. My brother worked construction under the table his whole life. In his 30's when he got really sick and filed for disability, he also had no tax credits. All that meant was that he'd be receiving the bare minimum which at the time was slightly over $500 however, he got his free medical, which is what he needed most. He filed for medicaid and was accepted immediately. He pays $200 a month for his share of the rent (he has 3 other roommates in a nice house in a decent neighborhood) and also gets food stamps. He is surviving on what he pulls in each month and accepts no other help from anyone. It took about 10 months to get everything for him. Unfortunately, I hear it can take up to 2 years for some people.
Penaltywishers, I'm assuming your last comment was directed towards me since I spoke about morality. It sounded a bit hostile, maybe you should read my comment again because I was agreeing with you.
Agree about getting a lawyer for disability. My friend had to appeal his denial 3 times and it took him almost 4 years before he finally got approval. But then he got paid for all the time spent appealing. He had to work under the table (tutoring) during that time because he wouldn't have had any money otherwise.
In my case, I could not find an on the books job and needed money for my family, so I finally accepted one off the books. Since I paid into taxes 21 years, never got a dime help from the government and was denied the one time I did apply because my husband made $200 per year over what they consider poverty level, we got nothing. So, while I would much prefer working on the books, I have no moral issues earning off the books.
Sweet Pea said... 14% more money into her pocket. The government has enough money. Nannies make very little as it is.
Penaltywishersgohome said... How can people equate paying taxes to morality? You're more moral because you place taxes ahead of shelter and food? While American business is subsidized by your taxes and pays zero? And you blame struggling citizens for working under the table? Hilarious!
easier on both ends...
ReplyDeleteBecause you make more money? Why else? I make 40k a year under the table... I would make what, 28k if I was on the books? No thanks.
ReplyDeleteI think a simple answer would be that nannies can make more money when paid under the table. Especially in the current economy, where parents are wanting to pay less and there are fewer jobs to be had, sometimes people just have to take what they can get.
ReplyDeleteThis is the way I understand it to work. If I'm wrong, please correct me.
If a family offers $400 per week before taxes, then both the nanny and the family are paying about 7% of that to the government. So the nanny gets that percentage taken off her pay, and the family pays that in addition to the $400. So If the nanny is paid under the table, the family has to pay less and the nanny gets to keep the full amount. Sometimes, families can be convinced to pay more per week, say $450 instead of $400, since they're not having to pay the taxes.
When I interviewed for my current job I informed the family that I would like to be paid on the books. DB told me that several other nannies they interviewed (who asked for $200 less per week than I did) said that they preferred to be paid under the table because it would cost the employer less. He seemed to like that idea, but I stayed firm and I'm paid my asking salary, on the books.
I'm a 23 year old nanny with a Bachelors in something completely unrelated to childcare. I was a nanny in college and was always paid under the table. This is a temporary situation for me and I plan on going to grad school/pursue a career. Right now I am content to be paid under the table (asked to be paid that way) because I need the extra money.
ReplyDeleteM-O-N-E-Y, honey! :)
ReplyDelete14% more money into her pocket. The government has enough money. Nannies make very little as it is.
ReplyDeleteI insist on being paid on the books. It can be very hard to find a job with a family willing to pay on the books, because they don't want to pay the employer's share.
ReplyDeleteAgencies are required to tell clients that they are legally required to pay taxes, but many employers will still try to negotiate with the nanny to accept the job off the books. It seems the only employers willing to pay on the books, at least here in NYC, are the ones who can't afford to be caught breaking the law, lawyers, politicians, and celebs.
More take home money and easier to find a job.
ReplyDeleteI've worked under the table before, but I'm in a place in my life where I need the paper trail , so I'm on the books.
When you hire a person to work in YOUR home, you have many liabilities that you must handle. If a nanny injures herself on your property because it was deemed unsafe, then she could sue your butt off in court. If a nanny becomes disabled while on the job because her working conditions were "unsafe" then you can get in trouble. Bigger companies usually have liability insurance to cover all this, however homeowners rarely can afford this. It just makes it easier for everyone involved if the nanny gets paid under the table. It is a win-win situation for many.
ReplyDeleteParents don't want to deal with the "nanny tax" paperwork, even though it can only benefit them. In CA (northern, not southern), people don't value in-home domestic childcare as much as in other parts of the country (and the world) and many of my interviews have been disappointing in the area of requesting payment on the books. Parents believe a nanny is just doing this for fun, I guess. That's been my experience...
ReplyDeleteNannies who conspire with their employers to cheat the IRS do so mainly because they are too short-sighted to see the benefits of being paid legally.
ReplyDeleteThe prime benefit is the access to unemployment when they are fired. Secondary benefits include being easily able to establish a credit history with proof of income.
Is paying taxes fun? Nope, but it's the correct thing to do.
I would be thrilled if the feds ever enacted the Fair Tax, which would eliminate the chance for people to cheat the IRS. Doubt that will happen, but with the current administration staying in power and focused on taxing all the "rich people" to death, I bet there might be more intense enforcement of "nanny tax" laws. If that does happen, I hope the nannies who choose to cheat get hit with tax penalties as well.
Tales, exactly,my job finishes soon, it's comforting to know I can collect unemployment, and take my time finding a job that "fits"
ReplyDeleteTales,
ReplyDeleteI second your plea for enforcement of the tax laws. I think this has to start with the employers, however. Nannies can only work off the books if employers are willing to break the law and hire them.
To be clear, you cannot collect unemployment if you are fired.
In addition to unemployment and worker's comp. a huge benefit of working on the books is social security, which is 15% of salary. Half comes out of the nanny's salary, the other 7.5% comes out of the employer's pocket. That is money she is losing if she is not on the books. Look at it like this, you put 7.5% into savings for your old age, and the employer matches it.
For those who choose to work off the books, How much are you saving towards retirement? How big a cushion do you have if you lose your job and don't find a new one for some time? If you have a serious injury on the job, can't work and have medical expenses, will you be OK financially? Think about it.
I suppose the simple answer is because they can.
ReplyDeleteI work on the books now, but have worked under the table in the past.
I can't be too critical of those who work off the table. I've done it in the past and had my reasons.
When I chose to work under the table I desperately needed a job, and that was the only job that was available to me.
8 months down the road I was able to find work being paid on the books.
I prefer to be paid on the books. I've reached a point in my life where having a record of employment is extremely important. I need for school, for housing, for a car and the list goes on and on.
I have to say it was nice to know when I was laid off my last job that I had the option of filing unemployment if I was unable to find a job quickly.
It's also a way to save for the future. Though I have zero faith in social security at least for my generation.
Simple answer: because they like the extra money and don't understand what taxes are for. If they educated themselves they would feel a moral responsibility as a citizen to pay taxes.
ReplyDeleteIn some states there is such a thing as being fired "at will- no fault of your own" and under this circumstance one can collect unemployment. Many people who collect unemployment ($1800 maximum/ month, often much less) work under the table while collecting in order to boost their income, as any income on the books counts against unemployment income.
ReplyDeleteI disagree that such people do not understand their moral responsibility. When someone goes from making a living to living off of $1800 a month, their moral responsibility is to do their best not to get evicted, to continue to feed their kids and maintain their cars, pay for school pictures and field trips. Working under the table is a smart decision in these situations. Judging people for these decisions and wishing penalties on them is ridiculously mean spirited. Workers only collect unemployment because of their years of paying into the system with their previous above table jobs. They've fulfilled their "moral" duties plenty.
As much as I think 'Penaltywishersgohome' is wrong, I can certainly understand their position. I can also empathize with someone who, after losing a job that pays the bills, ends up losing their shirt when they find themselves with no income. So collecting a measly $1800/month from unemployment, and getting a job that pays under the table, who then gives a crap about morality? Especially when you have extenuating circumstances like being a single mom with mouths to feed.
ReplyDeleteHow can people equate paying taxes to morality? You're more moral because you place taxes ahead of shelter and food? While American business is subsidized by your taxes and pays zero? And you blame struggling citizens for working under the table? Hilarious!
ReplyDeleteSometimes one has to do what one has to do to survive and feed his or her family.
ReplyDeleteThe way the government has things set up, if a person received food stamps, unemployment benefits, AFDC, Disability, etc....even a small amount of money can wreck havoc on things. It's like people want to take one step forward and instead they are taking two steps back because whatever money they earn "on-the-books" penalizes them overall. I do not think people who work under the table are bad, they just are trying to survive like everyone else.
I really feel for those that are single parents as well as those that support older parents. Every little penny counts and could mean the difference between bread in the cupboard and glasses to see the board in class.
I would have a problem if someone were living like a king while working off the books, but I have never witnessed this.
It's just regular folks who are trying to put clothes on their children's backs and X-mas presents from the 99cents store under the tree.
I was fired & I collected $1,200/month unemployment for 18 months in 2002-2004 in California. I also got my job back and received back bay to make up what I had lost out on. I worked six more months & then quit. I was only making $20 an hour straight time. It wasn't worth it to me to work anymore. I make more staying home and occcasionally working on my .com. Oh also when I was collecting, I was also working under the table. My moral obligation was to myself and my child. I was and still am unconcerned with the governments needs. My familys needs will always trump everyone elses. Always. That's what mothers do. They look out for the survival of their own first and foremost.
ReplyDeletePenalty wishers, the circumstances you describe are unique and not what most of us were referring. When I said poeple who work under the table don't understand moral responsibility, I'm talking about those who refuse to pay taxes.
ReplyDeletePaying taxes sucks, I know. I am trying to get approved for Social Security Disability and I can't because I worked off the books for 10 years. I do not have enough "credits." Work on the books.
ReplyDeleteDoing PT babysitting while collecting unemployment and looking for a new job is a different issue.
ReplyDeleteIf someone is collecting unemployment, that means the job they lost was on the books. The big debate is about nannies working full time and neither they nor their employers paying taxes.
Wonder Woman, thats bullshit. Get yourself a lawyer if you don't already have one. My brother worked construction under the table his whole life. In his 30's when he got really sick and filed for disability, he also had no tax credits. All that meant was that he'd be receiving the bare minimum which at the time was slightly over $500 however, he got his free medical, which is what he needed most. He filed for medicaid and was accepted immediately. He pays $200 a month for his share of the rent (he has 3 other roommates in a nice house in a decent neighborhood) and also gets food stamps. He is surviving on what he pulls in each month and accepts no other help from anyone. It took about 10 months to get everything for him. Unfortunately, I hear it can take up to 2 years for some people.
ReplyDeleteSounds like he is getting Supplemental Security Income and Medicaid, not SSD and Medicare, which require work credits.
DeletePenaltywishers, I'm assuming your last comment was directed towards me since I spoke about morality. It sounded a bit hostile, maybe you should read my comment again because I was agreeing with you.
ReplyDeleteAgree about getting a lawyer for disability. My friend had to appeal his denial 3 times and it took him almost 4 years before he finally got approval. But then he got paid for all the time spent appealing. He had to work under the table (tutoring) during that time because he wouldn't have had any money otherwise.
ReplyDeleteIn my case, I could not find an on the books job and needed money for my family, so I finally accepted one off the books. Since I paid into taxes 21 years, never got a dime help from the government and was denied the one time I did apply because my husband made $200 per year over what they consider poverty level, we got nothing. So, while I would much prefer working on the books, I have no moral issues earning off the books.
ReplyDeleteSweet Pea said...
ReplyDelete14% more money into her pocket. The government has enough money. Nannies make very little as it is.
Penaltywishersgohome said...
How can people equate paying taxes to morality? You're more moral because you place taxes ahead of shelter and food? While American business is subsidized by your taxes and pays zero? And you blame struggling citizens for working under the table? Hilarious!
You 2 said it all!!