Are nannying and housekeeping the only professions where people ask for someone else to pay their taxes for them? Nannies often ask for this. Some families pay nannies on the books and also pay her share of FICA, social security etc. and if the nanny is grossing $800 per week she is also netting $800 per week. Since nannies have often been paid in cash in the past families know that in order to keep a great nanny they have to have her net what she is quoted as a gross. She would only take home roughly 650 to 720 per week depending on her other income if she was paid $800 per week and paid her share of taxes. Is there any other profession in the world where workers ask their employers to pay the employee's share of taxes and social security?
I just interviewed a dozen nannies for our position which we advertised at salary DOE. I was prepared to pay about 900 per week. I was prepared to pay our portion of SS and taxes. I called my first pick and offered her the job. I offered her the salary of $900. She acted enthusiastic on the phone and said she would need to call me back because she was enroute to another interview. She emailed me later and said she would love to work for our family but she needed to net $900. A few nannies made it clear they needed to NET a certain amount. Some of these amounts were less than $900 but the nannies weren't among my top choices. I went with my second choice who had the highest salary requirement of $1,000 per week. (She would pay her share of the taxes). She also asked for health insurance after three months of service. I don't feel like I have any control of this situation!
My nanny brought us a letter from her tax preparer saying she needed to be legally employed on the books effective immediately. And that she would need the entire year of 2013 on the books. Right now, we pay her $600 cash off the books. We are not wealthy people. Having to pay taxes on this salary would really mean we cannot pay her the full $600. How do address this without losing our nanny?
Last year, we paid our nanny on the books and "grossed up" her salary. She was given a $480 tax refund (based of what we paid in for her). She put the check in an envelope with a note saying, "I don't think it would be fair for me to keep this". We have a great nanny, we don't want to lose her. We let her keep it, right?