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Hi Readers!
I'm Jenn. I'm a mom, animal lover (vegan), and non-profit leader who is all about sharing resources and having FUN. I lead an active lifestyle that includes a plant-based diet and lots of running, cycling, swimming, outdoor recreation, kayaking, and all things active and outdoors.
Popular Posts
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*Please Note: My experience with filing for the LMIA was based on the previous rules prior to Nov. 30, 2014, however I have updated the li... -
The time has come to begin preparing for your nanny's arrival...how exciting! Providing your nanny with quality orientation and tr... -
I have received several requests from readers to write on the topic of nanny sharing. After a LOT of research, I have put a post together... -
It's a common question to ask whether the cost savings of a live-in nanny are worth giving up the space in your home and having a... -
The 7th step in the sponsorship process is to send your future nanny the positive LMO and supporting documents so that they can proceed wi... -
*Updated LICP guidelines requires you to post on the Government of Canada's Job Bank, use 2 or more additional methods of recruitment (... -
*Based on costs in 2014. Updates include: minimum wage increase to $11.25/hr and the cessation of room/board deductions. We live in a coz... -
Welcoming a new nanny into your home can be an exciting and anxious time for everyone involved. Want to start your relationship off... -
So just to demonstrate my DIY gusto, I thought I'd post a little sampler of what's to come. I'll be honest, this DIY sampler has... -
When it comes to writing a blog about what a new nanny employer “needs to know” about contracts, payroll and CRA requirements...
What about deducting income tax? A lot of nannies that I have interviewed asked about what their net pay would include.. I am assuming that means after tax..
ReplyDeleteAlso - any WSIB we need to worry about?
Great question! Your nanny's net pay is calculated after CPP, EI, and provincial tax deductions. I didn't include the provincial tax deduction above because it was so nominal and I wanted to provide simple, ballpark numbers. If you visit either of the two sites that I listed at the end of the post, they provide great sample calculations including all tax deductions (based on a 40 hour and 44 hour work week). You can also use the Payroll Deductions Calculator found here: https://apps.cra-arc.gc.ca/ebci/rhpd/wlcm-bnvn.do
DeleteWe found it very helpful to (as the nanny's you interviewed have requested) share the net pay amount with prospective nannies. Once I post about interviewing you will see that what I did was send out a more in-depth document to nannies that we chose to interview that included more information about our family, as well as specifics on pay including gross and net income. We stressed it several times with prospective candidates to ensure that they understood what their take home pay would be. I hope this helps. :-)
And lastly, just to be clear (as I'm not sure I was before), yes the net pay that they're asking for is the amount after tax deductions. Since there is an employee and an employer contribution, they are wanting to know what their take home is after you deduct room & board, and their part of the tax contributions.
DeleteHello, firstly, I love your blog, great posts! Secondly, I had a question on deducting room and board. Is this done prior to calculating taxes, CPP and EI or after? Thanks!
ReplyDeleteThanks so much for your kind words Nadia! I'm glad you find it helpful. :-)
DeleteIn answer to your question, room/board does not impact your CPP/EI contribution amounts. Room/board, CPP, and EI etc are all deductions, and all deductions are taken from gross wages (i.e. your contributions are based on gross pay), so you deduct room/board after calculating taxes. CPP and EI are considered 'statutory deductions' which means that they are mandated by provincial/federal law and employer's don't have a choice in deducting them. Room/board was never considered a statutory deduction, it is a general source deduction, and of course under the new rules, it can no longer be deducted, but I'm assuming you're under the old LCP rules.
I hope that answers your question. :-)
I have a question regarding room and board :) Are you still planning to deduct room and board considering the changes to the program? Our nanny has been here exactly one week and I did payroll for the first time today. I did deduct but the agency we used is encouraging us to consider not deducting room and board as our nanny could leave us for another employer who would not make these deductions...she would still be grandfathered for permanent residency under the old program as per changes eff. in Feb. Just wondering if you have given any thought to this and what you decided to do... TIA
ReplyDeleteHi Ashley. Great question! Yes we are absolutely still planning on deducting room and board. That's an interesting perspective that the agency provided you, but one that I would have to respectfully disagree with (but hey I'm no expert...just a mom whose done some research, is passionate about good relationships and loves to write).
DeleteHere's my thinking - first of all, we addressed this topic with our nanny openly. She communicated to us that she feels that it is very fair to deduct room and board, and that the alternative of finding live-out accommodations would sink a lot of nanny's budgets. While the agency may be telling you that other employers will offer it free, I'm not entirely true that this is the case, it could be (they would probably know better than me), but I would think that a lot of families will choose to hire in the live-out stream of the new program because they don't want to pay for free room/board. For me personally, I just wouldn't be able to wrap my mind around it. I am all for fair treatment and wages, but our basement suite used to rent for over $1,000/month! I think providing this space to our nanny and including food for only a few hundred dollars each month is beyond a good deal that I am happy to provide, but wouldn't feel comfortable offering for free, and the impact on our monthly budget if we were to offer it free would be significant. Here's another piece, I guess for me personally I would say that if your nanny is that short sighted to leave (a presumably) great employer who treats them kindly for the sake of a few hundred dollars a month in room and board costs, then they probably aren't someone who you want looking after your children and integrating into your family unit anyways because it shows a real lack of an ability to see the big picture, as well as a lack of characteristics such as commitment, loyalty, and consideration. I suppose I will end on this, every family needs to make decisions like these with their family's interests in mind and with their own comfort in mind. I myself, wouldn't be comfortable making a fear-based decision that I think is unfair to our family, but then again, I'm not very risk averse and neither is my husband. If for whatever reason our nanny decided to leave us then we would be heartbroken, but we would inevitably chalk it up as a life lesson and decide on our next move (that's to say that we aren't going to make decisions that we feel aren't right for our family out of fear of her leaving). Having said that, I am very much hoping our nanny will be with us for a long time, but I have to trust in my gut that we are offering her other benefits besides free room/board such as treating her with the utmost kindness and respect, offering additional paid vacation (3 weeks/year), and offering her a TTC allowance each month in addition to more basic perks like a TV with Netflix in her bedroom, a computer with the internet and Skype etc.
I don't know if I was really any help there or if I just rambled incessantly, but I hope that whatever you choose, you make a deliberate decision that feels right to you, and not one that you feel pressured into making.