HomePay Payroll Review 2021

Before you pay your employee (whether that’s weekly, monthly, or daily), HomePay sends you an email detailing your employee’s wage and the amount withheld in payroll taxes. Then HomePay makes the payment through direct deposit, or the team can create a paper check. Your employees will get their own email with an electronic pay stub for their personal records. HomePay will also mail out your employees’ W-2 forms at the end of the year.

HomePay also makes itself the go-between for any communication between you and the IRS. You won’t have to struggle through an audit on your own or try to keep up with changing tax codes and requirements; HomePay does it all for you.

HomePay has been in business since the early 1990s, and its US-based customer service team ditches the phone-tree trap and responds to phone calls quickly. If you want to manage payroll outside of HomePay’s hours, you can check out your myHomePay.com account to access archived tax filing reports, see your employee’s info, and verify any tax withholding amounts.

If you need more services than just payroll tax deductions, HomePay has a few additional offerings. In particular, the company can pair you with a workers compensation insurance broker who helps you craft the right insurance plan for your unique household.

Let’s start with the most obvious downside: HomePay’s high cost. Most HomePay customers will pay $900 to $1,000 a year for payroll services. In comparison, SurePayroll, our favorite nanny payroll provider, costs around $240 a year for similar services.

And while we like HomePay’s customer service expertise, we don’t like their limited contact options and hours. You can’t chat online with a HomePay customer service representative, and the customer service team is only available 8 a.m. to 6 p.m. central time Monday through Thursday and 8 a.m. to 5 p.m. central time on Fridays. If you need help from HomePay on a holiday, on a weekend, or after regular business hours, you’re out of luck.

You could be a household employer if you meet the following criteria:

• You hired a nanny, babysitter, maid, nurse, caretaker, cook, or another person who works out of your home, and you pay this person more than $2,200 a year. (In contrast, a babysitter who works out of their own home is self-employed.)
• You direct the employee’s work, including what they do and how they do it. (For instance, your house cleaners don’t choose what to clean on their own; you tell them what and where to clean.)
• You provide the supplies, materials, or tools the employee needs to do their job at your home.

It doesn’t matter if your nanny or babysitter works part time or full time, if you hired them through an agency or through an ad in the paper, or if you pay them by the hour, week, or month. They’re considered your employee regardless, as long as you pay them more than $2,200 a year—which means you’re responsible for deducting their payroll taxes and filing tax forms at the end of the year.

However, you aren’t a household employer if you hire a contractor to repair your roof, a landscaping company to take care of your lawn, or a daycare owner who works out of their own home. If the person you hire has their own company, uses their own tools, and decides how they carry out the work you want them to do, then that person is self-employed and will file their own taxes quarterly or at the end of the year.

Payroll taxes are the taxes you’re required to withhold from your employee’s paychecks and remit to the federal government. Typically, you only need to withhold Social Security taxes and Medicare taxes (collectively known as FICA taxes) from your employees’ paychecks. You do not need to withhold federal and state income taxes unless your employee asks you to and you agree.

You’ll also need to match your employee’s contribution to Social Security and Medicare out of your own pocket. Additionally, you’ll pay the federal unemployment tax (also known as FUTA taxes) to contribute to unemployment benefits.

You can learn all about which payroll taxes you need to pay on the IRS’s website.

No. Unlike typical small businesses, household employers aren’t required to withhold federal income taxes from their employees’ paychecks. However, an employee might ask you to withhold their income tax to make tax returns easier at the end of the year. If you agree, you’ll need to fill out and file some additional tax forms.

HomePay Provided by Breedlove’s payroll is a good option for householder employers who aren’t overly concerned about costs. If you just want a nanny payroll service that covers the basics and makes your new life as a small-business owner a little less overwhelming, it’s a solid choice with an easy setup.

Want to see other payroll options? Our review of the year’s best online payroll software for small businesses can help you kick off your search.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.