Getting Paid Under the Table as a Nanny: Advantages and Disadvantages

Working as a nanny is an incredibly rewarding job. If you have a passion for working with kids and an ongoing interest ...

Working as a nanny is an incredibly rewarding job. If you have a passion for working with kids and an ongoing interest in early childhood development, a career as a nanny is an amazing way to care for, educate and make a difference in children’s lives. 

And as a nanny looking for a new job, you’ve of course pictured the ideal scenario- you glide through the interview process, match with a great family to work with, love the proposed schedule, and tada! You’ve gotten the official offer for your job. You’re thrilled, and just about ready to accept, when your prospective employer wraps up the conversation with “And cash under the table is ok right?”

Pump. The. Brakes. 

Why? Because the family employing you isn't likely a large scale organization. There’s no water cooler surrounded by gossiping staff, 12 ft high cubicles, or an HR department. It’s often just a typical working family that has set aside some of their pay to ensure they can afford their in-home childcare. Things like payroll processing, insurance, tax compliance, etc… haven’t even been factored into the big picture plan. Under-the-table childcare has become popular — and in some areas, nearly mainstream. It's simple and easy — two things you usually crave when energetic kids are involved! But where does this leave you?

It’s at this point, when weighing their options, a lot of nannies are finding themselves unsure of how to move forward. “Do I accept the cash under the table, or do I want over-table pay? What are the pros and cons in either case? What questions should I be asking?” The benefits of being paid under the table as a nanny can be attractive at first- but also short-lived and limited. In the long-run, you might be better on the books.

So before you reply with a resounding “yes!!” take a beat- pause your zoom meeting, put that prospective employer on hold, and read on to see how your options compare. 


Advantages of Being Paid Under the Table

There are of course a handful of reasons for why getting paid ‘’under the table’’ can be an attractive option. For example:

It's convenient.

When a client pays you under the table, that means they won't be paying social security or other taxes on your behalf. Of course, many clients are initially open to paying less tax and not having to fill out all the related paperwork. Paper cuts are a nightmare, after all!

Paying under the table can leave money in your client's pocket, and so they might be willing to pay the nanny a higher rate. Earning an extra dollar or two per hour can be enticing in the short-term. After all, you do have bills to pay.

It's easier to set up

Instead of facing days worth of back-and-forth and paperwork when you're hired "on the books," you can get right to work when nannying under the table. You may shake hands and agree on a certain rate per hour, talk about the responsibilities required of you, and start working. This simplicity is enticing. Watching kids is more fun than negotiating a holiday pay structure, after all! 

Everyone like cash

To avoid leaving a paper trail, most people who hire nannies under the table end up paying in cash. This can be nice since it means you do not have to set up a bank account, cash checks, or worry about direct deposit. And we get it- who doesn’t love holding a bunch of cash in their hands, or tossing it up in the air like you’ve hit the lottery. Cash is... well... cash! 

parks and rec throwing money


Disadvantages of Being Paid Under the Table

We hate to be the bearers of bad news- but in most cases, the disadvantages outweigh the advantages when it comes to getting paid under-the-table these days. For example...

It’s illegal- and you'll still owe taxes

We know, we know- illegal is not a fun word. But  paying household employees “under the table” is in fact, illegal. It puts the family’s finances at-risk, and if they’re later audited, you AND the family would be financially responsible for your respective share of those government taxes. 

Plus, whether your employer is on board on not, it's still your responsibility to declare your under-the-table income to the IRS.

Yep, we know that's a groan-triggering reality!

But in a very real sense- you could find yourself in some hot water if you’re not careful. Filing taxes gets complicated when you have under-the-table income, and the words "taxes" and "complicated" are probably not two you want to see together... unless you're an accountant. Their jobs might be even more stressful than nannying. 

If you don't file and pay taxes, the IRS has no time limit on collecting taxes, penalties, and interest for each year you did not file. The IRS can levy, seize and sell any type of real or personal property that you own or have an interest in. The saying about “death and taxes” holds some weight here. 

taxes funny

You are not entitled to paid leave

Yep- you read that right. No entitlement to PTO, vacation time, or sick leave. And if you’re working full-time with little humans, you’re definitely going to need a break here and there. 

More importantly, if you or a family member gets sick while you’re employed, you will not be entitled to receive any payment for the time you take off. The laws that enact paid sick leave for households and their employees won't work for you in this case. Unfortunately, the current Families First Coronavirus Response Act won't be available either- and now, more than ever, ensuring you have coverage in these scenarios could not be more important.  

You won't have much, if any, recourse if something goes wrong.

When you're working as a nanny under the table, you forego most of the protections you'd have as an official employee. Sadly, you don't really have any real protection if something goes wrong. 

  • If you are injured on the job, there will not be any workers compensation insurance for you to turn to.
  • If your employer simply stops paying you, there's no way for you to legally go after the funds you are owed. 
  • Protections from misconduct, discrimination in the workplace, or unfair practices are nearly non-existent

Dealing with this stuff is about as unappealing as dealing with a diaper blow-out! Protecting yourself long term should be your number one priority- your health and well being aren’t likely worth the dollar or two more an hour. 

You Don't Qualify to File for Unemployment

Filing for unemployment comes in handy when you are in-between jobs. Household jobs have a high turnover, and you may need another job sooner than later. If your employer terminates you unfairly, you will not be able to qualify for unemployment unless you can show a verifiable history of employment. Not having a safety net, especially in these crazy times, is not a mental burden you want to take on- as we’ve seen over the last few years, losing your job can also mean losing your car, your home, etc… if you’re unable to bounce back quickly. 

You'll have a hard time getting a loan. Or a credit card. Or a mortgage. Or a student loan. Or...

You get the idea. When you work off the books, it can be really tough to get any kind of loan or long term financing agreement. Lenders will not consider under-the-table, unreported income when you apply for a loan. In the eyes of potential lenders- you won’t appear reliable. A lack of reported income can even make it hard to open utility accounts or find an apartment to rent. 

Work under the table, and you might have a hard time...buying your own table.

Exploring Win-Win Solutions

While accepting under-the-table pay as a nanny can be tempting, it's really not a sustainable choice in the long-term. You are far better off putting the time and effort into being hired as a legally hired employee. In exchange for a little time and the taxes you pay, you get better security, protection, a credit history, and the peace of mind that comes with knowing the IRS won't send you a huge tax bill one day. 

That's worth a little paperwork, right? 

Plus, there’s a win-win solution to make things ever easier for you, and your potential employer-  Happiest Nanny was designed with all of these administrative hassles in mind, making it easy for both you, and your family employer to have the best possible experience. Choosing to work within our intelligent platform means that your family employer can completely offload the payroll, tax, legal, and administrative work, while we ensure that you get paid on time, and have access to all of the legitimate resources you need to protect yourself, and your future. No signup fees. No headaches.  No risk. Not to mention, ongoing resources paired with 100% US based support. The way we see it- as a person who is dedicating their lives to caring for our little humans- you deserve nothing less. 

If you’re ready to land your next dream job, with all of the perks and coverage you deserve, head over to our Nanny portal and create your free profile today. 

Get Started Now

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