Do-it-yourself guides for hiring a nanny, paperwork, and the nanny tax

Your Nanny and Washington State's Paid Family and Medical Leave Policy

When you are employing a nanny, you have to keep track of the rules and regulations on several administrative levels: federal, state, county and city. In Washington State, the main rules and regulations to be aware of are:

  1. You need to report and pay Washington State unemployment insurance.
  2. You need to deal with Washington State’s Paid Family and Medical Leave program.
  3. If you live in Seattle, you need to follow Seattle’s Paid Sick and Safe Time ordinance. This ordinance describes how much paid sick and safe time you have to give to your nanny.

Our detailed guide has more information about all of the specific requirements in Washington State.

The Paid Family and Medical Leave program is relatively new. Here is the official site and documentation, and this page summarizes the employer responsibilities. This site answers more questions and explains when employees are eligible for benefits.

How we reacted

How did we deal with the Paid Family and Medical Leave program?

  1. Inform your nanny about her rights. We printed the leaflet referenced on this site and included it in the bi-weekly pay stub for our nanny. (As of April 2021, there are also other notification requirements.)
  2. Include necessary information on the pay stub. I adapted the spreadsheet we use for creating pay stubs. In particular, the cost for the program in 2019 is 0.4% of the nanny’s gross wages. This cost gets split between an employee and an employer contribution. Interestingly, an employer with less than 50 employees does not need to pay the employer part of the program. As a result, we only deducted the employee share on the pay stub. The employee share is 63.33% of the 0.4%. In other words, let’s say the nanny earns $2,500, we deduct $2,500 * 0.004 * 0.6333 = $6.33 from the pay stub. In other words, the nanny pays for the program out of her income. The program is free for us. Obviously, you need to have a discussion with your nanny to explain this. Also, as an employer, you can pay the employee’s share. Update: For 2021, the authorative site explaining this is here.
  3. Report and pay via SAW. We went to SAW, created an online account for Paid Family and Medical Leave and reported as well as paid the quarterly costs.

That’s it! Overall, the Paid Family and Medical Leave program can be free for you as the employer. You can also take over the cost for your nanny. What the program definitely brings with it, however, is more paperwork!

At least we won’t get bored.

As always: good luck to all you fellow parents!