Domestic workers are hired to work in a private home. They do things such as housekeeping, or provide care, supervision or personal assistance to children (nannies) or people who are elderly, ill or disabled (caregivers).
There are tax obligations that must be addressed for these categories of workers and they can be a little complex. By utilizing the services of a reputable NLCA Chartered Accountant you will have the stress removed of having to attend to these tax matters and know that you have complied with the Canadian tax laws. The following outlines some of the tax requirements that have to be complied with depending on which category of work you come under. As a NLCA Chartered Accountant providing accounting services for domestic workers we are well versed in the completion of these CRA requirements.
Tax Services Performed for Nannies and Caregivers
- Obtain a payroll tax account number
- Obtain a Workers Compensation and Insurance Board account
- Complete disability tax credit certificate, if required
- Provide payroll and taxation services to employers of nannies and caregivers
- Calculate vacation pay
- Remit monthly payroll taxes
- File annual T4 and T4 Summary form with Canada Revenue Agency
- Prepare personal tax return for nanny and/or caregiver
- File record of employment for terminated employees
- Claim child care expenses on personal tax return
- Claim caregiver amounts on personal tax return
Ontario Employment Standard Laws
Domestic Workers are covered under employment standard laws in Ontario. Some of the items covered under employment standard law are as follows:
- minimum wage**
- regular payment of wages
- hours of work protections (ie. maximum hours of work, daily and weekly/biweekly rest periods)
- overtime and vacation pay
- public holidays
- pregnancy and parental leave
- family medical leave
- termination notice, severance pay and/or pay in lieu of notice
** Note: Employers can take into account the provision of room and meals to a domestic worker when calculating minimum wage.
Workers Safety and Insurance Board (WSIB)
WSIB provides no fault collective liability insurance to employers.
Most businesses in Ontario must register with WSIB within 10 days of hiring their first worker. If you are not sure about whether or not your business needs to be registered, call WSIB at 416-344-1000 or 1-800-387-0750.
Family Caregiver Amount
New for 2012 and subsequent years you may be able to claim an additional $2,000 if you have a dependant with an impairment in physical or mental functions
You must have a signed statement from a medical practitioner showing when the impairment began and what the duration of the impairment is expected to be.
Some additional details are available at Department of Finance Canada website
NLCA Chartered Accounting and Tax Services
There is no need to be worried about meeting all of the Canadian tax requirements to keep you in good standing with the CRA when it comes to the domestic workers in your employment. As a small business and personal NLCA Chartered accountant’s can ensure your tax obligations are completed correctly. Or if you are a nanny or caregiver that requires tax assistance we are available to look after your tax needs as well.
Please feel free to fill in the form on the top right hand side here to arrange for a FREE no obligation consultation.