# calculating ei cpp taxes for nanny



## tobuyornottobuy (Nov 19, 2011)

Hi
I have hired a nanny (live-out) and I will be paying her $12 an hour after CPP EI and tax. I have never done payroll before and I dont know how to work out how much cpp, ei and tax i need to pay for her.

I have got a business number with CRA.

Anyone know of any programmes I can use for this? or any other suggestions? ...using my accountant is not out of the question, just trying to save money!

Many thanks, mc


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## Homerhomer (Oct 18, 2010)

http://www.cra-arc.gc.ca/esrvc-srvce/tx/bsnss/pdoc-eng.html

free program from cra.

Not sure if there is an option to put in net, if not you will have to play around a bit to get the proper gross.


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## Plugging Along (Jan 3, 2011)

You can use the payroll calculator on the car site.

Just enter the the amounts until you get the $12 net. It is really easy. N


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## OhGreatGuru (May 24, 2009)

I would add a caution about promising a nanny a certain net after tax. Her final tax bill will depend on a number of factors specific to the individual person. Even the tax withheld will depend on to some extent on variables specific to the nanny.


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## MoreMiles (Apr 20, 2011)

Exactly... if that nanny has other income (eg, large couch potato portfolio dividends), she may be in a high tax marginal rate... your $12 net may mean $20 before taxes.

Can't you just hire her as a contractor? Just pay her hourly rate and ask herself to manage taxes on her own. If she has more than one client, she can work as a contractor for sure.


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## Homerhomer (Oct 18, 2010)

what nanny makes elsewhere is irrelevant to the employer, the calculation is pretty straight forward, if she worked 10 hours a week you pay her net $120 and gross it up based only on this pay, just like any other employer would do. What she owes when filing income tax is her problem, if she asks for more withholding (what are the chances of that) you can reduce her net.


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## MoreMiles (Apr 20, 2011)

Homerhomer said:


> what nanny makes elsewhere is irrelevant to the employer, the calculation is pretty straight forward, if she worked 10 hours a week you pay her net $120 and gross it up based only on this pay, just like any other employer would do. What she owes when filing income tax is her problem, if she asks for more withholding (what are the chances of that) you can reduce her net.


It matters depending on the contract. If there is a written contract guaranteeing after tax pay, she can submit her tax record and ask you to adjust it. Why would you subject yourself to that type of labour law litigation anyway? Just pay her as a contractor... If she works at multiple homes, she is already slef-employed. Does she follow a 8 to 5 schedule or does she come and finish work at her own hours? As an employer, don't forget the paid vacation, maternity leave job protection, new Ontario pension coming up soon, overtime 50% more pay, monthly business payroll submission, WSIB insurance, etc. Good luck to you.


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