So, you're about to hire a nanny for the first time. Beyond the initial thrill of finding the perfect caregiver, there's the necessary but sometimes overwhelming task of understanding your legal responsibilities.

As an employer, you may have certain obligations to pay taxes and contribute to the Canada Pension Plan (CPP) and Employment Insurance (EI), depending on the nature of the employment.

Sound confusing? Well, don't worry. We'll explain the different types of employment relationships and how to pay your nanny legally. This blog will focus on hiring live-out nannies in Canada.

What Type of Nanny Are You Hiring?

Before diving into the legalities, let's figure out the type of nanny you're bringing into your family. This will determine your employment nature and your obligations. You can either hire them as an independent contractor or an employee.

Independent Contractors

Independent contractors are usually short-term hires or hired for a certain contract. For example, suppose you're hiring a temporary nanny for a month or a babysitter on a casual basis. In that case, they'll likely fall under independent contractors (although this isn't a one-size-fits-all situation).

It must be clear to the nanny that they are offering their services as an independent contractor. You can learn more about hiring independent contractors here.

Independent contractors are considered self-employed. They take on all associated employment expenses, including CPP, EI, holiday pay, and sick leave. So, you are only responsible for paying their hourly rate.

With AmbiMi, you have the option of hiring independent contractors for gigs and contracts. This is a great option if you only have a temporary need and don't want to worry about the financial and legal obligations that come with employees.

Employees

In Canada, you are an employer if you hire a person, establish regular working hours, and assign and supervise the tasks performed (see more here). For example, if you're hiring a permanent nanny on a set schedule, you are likely an employer, and they are your employees.

In this case, you must consider the legal responsibilities, such as taxes and deductions, which you can read more about below.

With AmbiMi, you have the option to hire childcare employees through temp-to-perm placements after a MiHome Nanny Working Interview. This lets you trial a nanny for a couple of hours to give you an idea of what the relationship with a nanny is like and allows you to judge the person before hiring them permanently.

You're an Employer, What Next?

If you've determined that you are an employer, you may be feeling a bit lost. Follow this checklist to make sure everything's in order for your nanny to start:

Get a business number from the Canada Revenue Agency (CRA)
List your nanny as your employee (gather their SIN number, full name, and address)
Use the CRA Payroll Calculator to figure out monthly tax remissions (this will tell you the tax, EI, and CPP deductions)
Fill out your remittance form from the CRA
Remit your payment (by mail or through your bank)
Keep a record of your forms and invoices for tax season
Complete a T4 for your nanny at the beginning of each year

Other Responsibilities of an Employer

Now that we've covered deductions, there are a few other things to keep in mind. Hiring a nanny is a big deal, and they rely on you as their employer.

Pay Periods

Other than tax remissions, you will be responsible for providing pay slips and a set pay period (i.e., every two weeks).

Vacation Pay

Like any other employee, nannies are entitled to paid vacation time and accrue vacation pay. Please refer to your provincial regulations for more information on vacation pay.

Sick Days

Sick days are unavoidable, and as a responsible employer, you must accommodate time off to help them recover. Keep in mind that all full-time employees (37.5 hours per week or more) are entitled to five paid sick days per year in Canada.

PS When sick days inevitably happen, you can use AmbiMi to hire a replacement on-demand for a morning, day, two days, or even a week!

Statutory Holidays

Nannies may or may not be entitled to paid statutory days off, depending on your provincial employment standards. Please refer to your provincial regulations to determine the statutory holidays and rules laid out.

Overtime

If you require a nanny for more than eight hours per day or forty hours per week, you may be subject to paying them an overtime rate. Please refer to your provincial regulations for overtime rates.

Employment Termination

Nannies can quit their jobs at any time, preferably with notice, but it is not a requirement. As the employer, you can terminate the nanny's employment at any time as long as you provide them with adequate notice or pay in lieu of notice.

Once the employment ends, you must pay their outstanding wages, including any outstanding vacation pay. Additionally, you must provide a record of employment (ROE) and file a copy with Service Canada.

For more information on BC, visit the Government of BC website here.

Hiring a nanny is not just about legalities; it's about creating a positive and supportive environment for your caregiver. As you navigate this new chapter, remember that AmbiMi is here to help!

Navigating the Legalities of Childcare: How to Pay a Nanny in Canada