Hiring the Nanny

• STEP 1: Prepare a contract which outlines responsibilities and job descriptions, hours, pay (including how often, how much, expected deductions, room and board, extras such as WSIB, vacation days, sick days).
  • Familiarize yourself with the Ontario Ministry of Labour Employment Standards
  • 40 hour work week
    • Legally, employees can only be required to work for a maximum of 8 hours a day, or 40 hours per week, or the number of hours in an employer's established regular work day that is more than 8 hours (up to 48 hours per week)
    • After 44 hours nannies must be paid overtime (1.5x) or get time off (1.5x) in lieu of extra time worked
    • In reality, most employers do not pay nannies overtime as it is not practical, and they rather choose a flexible option where hours may or may not be standard everyday, extra days off may be given and overall, it often works out
  • Wage
    • Generally paid biweekly (every 14 days) OR semi-monthly (15th day and last day of each month). Biweekly is 26 pay periods per year and semi-monthly is 24 pay periods, so semi-monthly is slightly less per year.
    • Gross salary is based on HRSDC (Human Resources and Social Development Canada) requirement of $9.25/hour; most people agree on a net salary which generally meets the minimum, and then work backwards from there to calculate the gross salary needed to produce that net amount. (Net salary means what the nanny keeps after deducting room and board, income tax, EI and CPP).
    • Starting net salaries for live-in nannies
      • First job in Canada - $1000
      • More than 1 year experience in Canada - $1200
  • Room and board
    • $85.25/week for private accommodations; $53.55/wk for shared accommodations
  • Sick days
    • This is discretionary, but be fair - most nannies would not take advantage, and do you really want your nanny who has the flu to be sharing germs with your family?
  • Vacation
    • All statutory holidays off; lieu days if statutory holidays on weekend; 2 weeks paid vacation once working for more than 12 months
    • Vacation pay - 4% of gross yearly earnings to be paid before commencing 2 week vacation
  • Health insurance
    • Your nanny will not be eligible for OHIP coverage until 3 months after arriving in Canada, so it is up to you whether or not you want to purchase additional coverage for the nanny until OHIP kicks in
• STEP 2: Contact HRSDC to get an application to apply for approval. Tel 416-954-3111.
  • You may need to include an additional note explaining why you need a nanny
  • Expect to wait 8-12 weeks to receive the HRSDC letter of confirmation
  • (For more information, see HRSDC - Hiring Foreign Live-In Caregivers, and Ontario Foreign Worker Programs: Live-in Caregivers).
• STEP 3: Nanny can apply for a Work Permit
  • The Work Permit must be renewed every year
  • If you will be the nanny's first employer in Canada, then see this page.
  • If the nanny already has a work permit but is going to work for someone new, then see this page.
  • Allow 4-8 weeks for processing
• NOTE: STEPS 1-3 will often be done by an agency if you choose that route
• STEP 4: Call Revenue Canada to obtain a business number to become eligible to pay taxes as an employer (Business Inquiries: 1-800-959-5525)
  • This is necessary because, as any employer, you must pay Revenue Canada the income tax on your nanny's salary
  • Allow 2-4 weeks to receive the documentation
  • Download the "tax tables on diskette" (TOD) to be able to calculate the taxes needed to be paid (be forewarned that taxes change periodically so you may need to re-download the program and recalculate the taxes, but you will be notified). See this page for the program and more information.
  • Using TOD to calculate deductions
    • Run the program and go through the preliminary screens. Click Salary, then choose Pay period: Monthly (though you pay the nanny semi-monthly, you only submit taxes once per month i.e. Monthly), click Determine Gross Salary, then enter an approximate gross salary amount (approx $1600), and press OK.
    • To determine the net salary you need on paper, add room and board to the net monthly income you agreed on with the nanny (room and board is deducted after taxes), and that is the target net salary you want to see on the screen. Click Calculate, and check the figure in the "Net amount" line. If it is too high or too low, click Back to input screen, and enter a higher or lower figure for gross salary, as the case may be. Keep adjusting the gross salary amount to produce the desired net salary. Once the net amount figure matches up, you have thus determined the gross salary and tax deduction amounts, and can record these figures.
  • Remember that you must pay the nanny's income tax, CPP and EI; employers are also required to pay CPP (1X) and EI (1.4X) on the employee BUT this does not come off the nanny's salary, rather it is over and above it
  • Revenue Canada will send you monthly tax submission forms and taxes must be paid at the bank by the 12th of the month for the month before (once you are in good standing you may only be required to pay quarterly which saves many trips to the bank)
  • As an employer you are required to give the employee two T4 slips by the end of February each year (Revenue Canada sends the appropriate forms and the appropriate times)
  • Giving your nanny a monthly invoice will be helpful for both you and the nanny when preparing tax returns