Worried about calculating, deducting, and paying your new nanny’s payroll taxes? HomePay’s nanny payroll service can tackle it for you. While HomePay isn’t the best-known name in the world of nanny payroll software, the company offers basic payroll features and decades of nanny tax experience. These features don’t necessarily outweigh the company’s high pricing, but if you’re looking for experienced nanny payroll help and don’t care as much about cost, HomePay could be a good fit.
HomePay Payroll Review 2021
We recently reviewed this page to make sure our information was up to date. A few things have changed recently: HomePay lowered its quarterly price by $5 per quarter. More importantly, it eliminated setup and registration fees—a good move that makes HomePay much more accessible to new household employers.
Year-end tax filing fee
$75.00/mo. (billed quarterly)
|$100 (includes Schedule H, Form 1040, Form W-2, and Form W-3)||Federal and state tax calculations, direct deposit payments, employee onboarding||Sign Up|
Data effective 11/24/20. At publishing time, pricing and features are current but are subject to change. Offers may not be available in all areas.
What is HomePay?
HomePay started out as Breedlove & Associates, a payroll tax service geared toward household employers, specifically parents hiring nannies. In 2012, the original owners of Breedlove & Associates sold their business to Care.com, a company that helps families find at-home care. Now, HomePay is billed as HomePay Provided by BreedLove or as Care.com HomePay.
Whether you know it as Breedlove payroll, HomePay payroll, or Care.com’s nanny payroll service, HomePay delivers the same service: removing nanny taxes (or any household employee’s taxes) from your plate.
HomePay payroll features
If you use HomePay, you won’t touch your employees’ paychecks apart from setting their wages and reviewing HomePay’s summary pay period emails. Instead, HomePay will take the payroll wheel by providing these key services:
- State and federal payroll tax calculations
- Year-end tax document processing (includes forms W-2 and W-3 plus Schedule H for form 1040 and state annual reconciliation)
- Easily accessible archived tax returns
- Easy paycheck direct deposit on employee paydays
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 charges $75 a month, but bills you quarterly. In other words, you’ll pay $225 per quarter for HomePay, or $900 for the full year. If you add HomePay’s $100 end-of-year tax filing services, you’re looking at a yearly total of $1,000.
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.
With unlimited payroll runs and automatic tax filing, Gusto helps small-business owners worry less about payroll and put more time into growing their business.
- Get automatic payroll tax filing, including end-of-year tax forms
- Manage workers compensation insurance
- Track paid time off, sick leave, and holiday pay
HomePay pros and cons
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.
Nanny payroll FAQ
Am I a household employer?
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.
What are payroll taxes?
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.
Do I need to withhold income taxes from my employees’ paychecks?
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.
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.