Paying Substitute

[Sparkles]

I'm in the process of hiring a substitute. I'm so excited! It will give me so much more freedom and flexibility to take time off.

Anyways, for those of you with subs, how do you pay them? I don't want her as an "employee" because I don't want to deal with withholding taxes, plus wouldn't I have to pay workers comp and unemployment for her? But, I also read that you can't 1099 someone in child care, either.

I'll ask my accountant, too, just curious what you all do.

[Blackcat31]

I'm in the process of hiring a substitute. I'm so excited! It will give me so much more freedom and flexibility to take time off.

Anyways, for those of you with subs, how do you pay them? I don't want her as an "employee" because I don't want to deal with withholding taxes, plus wouldn't I have to pay workers comp and unemployment for her? But, I also read that you can't 1099 someone in child care, either.

I'll ask my accountant, too, just curious what you all do.

Unfortunately, you will more than likely have to do all the payroll, taxes and with holdings as anyone you hire is an employee.

Tom Copeland has an article about this stating

"A person who comes into your home to help you care for children is considered your employee, not an independent contractor. It doesn’t matter how little you pay the person or how few hours the person works for you.

There are two exceptions to this general rule. The first situation is a person who is self-employed in the business of providing substitute care for child care providers. Such a person should have a business name registered with your state and their own taxpayer identification number. She should work for more than one child care provider each year and use her own contract.

The second situation is when you hire a substitute through an employment agency and you pay the agency rather than the substitute.

Both of these exceptions are pretty rare. Anyone else that helps you care for children is your employee.

You hire someone for 3 hours to watch the children while you go to the dentist – Employee!

You pay a 16 year old girl in your neighborhood to help you care for school age children for 6 weeks over the summer – Employee!"

You can read the rest of the article here

[Sparkles]

Now, if I pay her less than $600, then there's no taxes, correct? Like I could just pay her cash for this year and see how it goes (I would only need her a handful of days for the rest of the year), and then maybe next year add her to payroll.

[Blackcat31]

Sparkles No, not true either. Just because you pay someone less than $600 in a year doesn’t mean this person is an independent contractor instead of an employee. If the person is helping you care for children then she is your employee (with few exceptions) no matter how little you pay her or how few hours she works.

If you pay an independent contractor (someone who already has their own tax id number and is registered with the state) less than $600 then it saves you some additional forms etc but even if you pay someone that does not meet the criteria of being an independent contractor less than $20, the IRS still requires you to treat them as an employee and have workman's comp insurance. etc

The ONLY way you can skip the payroll and with holdings stuff is to hire someone from an agency or hire someone that has their own tax ID number and is registered with the state and works for more than one child care business.

http://tomcopelandblog.com/what-is-a...ent-contractor

[JaeB]

I was considering a non emergency sub so I could give my families the extra reassurance about taking time off but then I snap back into reality and realize I don't make enough, can't trust anybody, and the parents don't need anymore reasons to not keep their kids home. Sorry no sub for me

[Sparkles]

I've never had a sub for these reasons, either! I've just had to close a lot lately due to appointments, and I need more flexibility - with my kids school events, appointment, etc. My sub is a family member, so I know I can trust her. I'd still be closed for all my regular closings (holidays, Christmas break, summer break, etc.)

[Blackcat31]

My sub is a family member, so I know I can trust her.

Here's an article about hiring family that might help clarify things.

http://tomcopelandblog.com/to-hire-a-relative-or-not

[Alwaysgreener]

Sparkles you could always try to talk her into being an independent contractor. Show her how to get a tax id, dba name and biz bank account. Encourage her to offer her services to other local day cares.