HomePay Payroll Review
HomePay is on the pricier end of nanny payroll services, but the company comes with decades of nanny-specific payroll experience and an easy-to-reach (during business hours) customer service team.
When you hired a nanny, the last thing on your mind was paying payroll taxes. After all, you aren’t opening a small business—you’re hiring one person to do one task in your home, not taking on a fleet of cashiers, waiters, or baristas, right?
Right. But at the same time, depending on how much your new household employee works and makes, you now run a business in the eyes of the government. Congratulations! And apologies, because your life is about to get a lot more complicated, especially when it comes to taxes.
Here’s the good news, though: you don’t need to shoulder the full burden of calculating, deducting, and paying your new employee’s payroll taxes, which include Medicare and Social Security taxes. Instead, if you’re a household employer, a nanny payroll service can tackle taxes for you. (Psst: Not sure if you count as a household employer? Skip to our definition to find out.)
HomePay isn’t the best-known name in the world of nanny payroll—that’d be SurePayroll, if you’re wondering—but the company offers basic payroll features and decades of nanny tax experience. These features don’t necessarily outweigh the company’s extremely 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.
|Type of fee||Cost||Features||Learn more|
|Registration||$100 one-time fee||IRS and state tax account set up, state new-hire reporting||Sign Up|
|Comprehensive Service||$230/quarter*||Payroll tax calculations, electronic pay stub access, employee direct deposit, monthly and quarterly tax preparation and filing||Sign Up|
|Year-End Tax Packet||$100/yr.||W-2 employee distribution, W-2 and Schedule H (filed with Form 1040) document preparation and filing||Sign Up|
No. As of 2019, you need to withhold Social Security and Medicare taxes from employees only if you pay them over $2,100 a year.1
What is HomePay?
HomePay has been around for a few years, but it’s changed names several times, so here’s a quick recap to get everyone on the same page.
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. But 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.
Since HomePay’s pricing is structured as a pay-as-you-go system, it’s hard to calculate at a glance how much it costs annually. Here’s the breakdown:
$100 one-time setup fee + $920 comprehensive payroll services + $100 year-end tax filing = $1,120
If you live in CA, MA, or NY, you’ll pay an extra $15 per quarter, so your annual cost for the first year will look like this:
$100 one-time setup fee + $980 comprehensive payroll services + $100 year-end tax filing = $1,180
Bear in mind that since you only pay the one-time setup fee once, you’ll pay $100 less the second year you use the service compared to the first year.
Not looking forward to communicating with the IRS if something goes wrong? No worries: HomePay makes itself the go-between for any communication between you and any tax agencies. 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.
- Track time and expenses
- Create custom invoices
- Accept online payments
HomePay pros and cons
- Decades of experience in the field
- Easy online account management
- Workers compensation add-ons
- Higher pricing than most competitors
- Limited customer service hours
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 (as long as the requests come during business hours—a problem we’ll talk more about in our cons section). 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.
As per our annual cost breakdown above, most HomePay customers will pay a little under $1,200 a year for HomePay’s services (or, on your second year of service, just under $1,100 a year—you’ll already have paid the one-time setup fee of $100). How does that compare to the competition? Currently, SurePayroll offers a year of promotional pricing for first-time clients, starting at $39.99 a month for one household employee. If you go with SurePayroll, that’s just $480 for the year.
Worse, we don’t think HomePay offers quite enough features to offset its higher cost. For example, GTM Payroll Services doesn’t charge extra for customers in California, Massachusetts, or New York, but it does offer an online customer service chat and a 401(k) option. And SurePayroll has a mobile payroll app and includes a 100% tax filing guarantee, which means they’ll shoulder any IRS fines if SurePayroll makes a mistake with your taxes.
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.
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 $2,100 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 $2,100 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?
As a new employer, you’re required to withhold these taxes from your employees’ paychecks and file them on the employees’ behalf:
- Social Security taxes
- Medicare taxes
FYI, employers also pay certain payroll taxes:
- FUTA taxes, or Federal Unemployment Tax Act taxes, which helps provide unemployment benefits
- FICA, or the Federal Insurance Contributions Act taxes, which are the employer’s contribution to Social Security and Medicare
You’re required to pay federal unemployment taxes only if you paid your household employee over $1,000 in any given quarter this year.2
Tax rates are subject to change, and different states can have different tax requirements. A payroll service like HomePay can tell you what the current tax rates are and withhold the right amount.
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.
1. IRS, “Topic No. 756 Employment Taxes for Household Employees”
2. IRS, “Topic No. 756 Employment Taxes for Household Employees”