Babysitting tax in Canada: what you need to know
Have you ever wondered if babysitting is taxable? Do you know how to file taxes for babysitting income? Don’t worry, our tips will help highlight what you need to know about your babysitting income tax!
Do babysitters need to pay taxes?
It depends. Whether or not you need to pay taxes as a babysitter depends on your country, how much you work, how much you earn, and other factors about your working situation. So, it all depends on these factors about whether or not you are allowed to skip the taxes or get paid in cash.
When is it necessary for babysitters to pay taxes?
As a babysitter, you are generally paid a gross income by the family you are working for. Your ‘employer’ (the parent/family) often does not account for and pay taxes for you ahead of time, based on your earnings.
In this case, the babysitter does still have to check if they need to declare their earned income to the government tax authorities.
How much taxes do babysitters need to pay?
Depending on the number of hours you work and your work situation, you may not need to be officially ‘employed’ by the family you are working for. In this case, they don’t need to withhold taxes from your income. However, if they don’t withhold taxes and you earn above a certain threshold, you still need to declare this income when filling out your income tax and tax return.
Is babysitting working under the table?
Under the table workers generally are paid in cash, and this practice in many cases can be quite common when it comes to babysitting. The benefit? Neither the family nor the babysitter has to go through the extra work or earn less due to taxes.
Working under the table may look more beneficial or valuable, however, don’t forget that in many cases this can be illegal. If you earn large amounts of money and don’t pay taxes on this, this can be seen as fraud by the government.
So, the big question is: ‘is babysitting working under the table’? In short, the answer to this is no, however, you do need to follow a few rules in order to avoid it becoming working under the table. This can depend on what country you live in. Check below to see the regulations for your country.
Babysitting taxes in Canada
Most babysitters in Canada do not make enough money from babysitting jobs to file for income tax. Also, babysitters are most often considered independent and are not required to file taxes, as you are not considered an employee and your income will most likely be under the basic personal amount set by the Canada Revenue Agency. The BPA in Canada for 2020 is $12,298 and will be $12,421 in 2021. However, the BPA will differ based on your province or territory.
How to declare your babysitting income
It is always useful to collect your receipts from your babysitting payments. Sometimes parents may claim the transactions as childcare expenses on their tax return form. Therefore, it may be required that you as a babysitter need to claim your babysitting income under self-employment if you make more than the amount stated in the basic personal amount. You should always discuss this in advance with the families you babysit for.
If you are a nanny (employed) or a childminder (self-employed), then it is also required that you file your taxes with the Canada Revenue Agency.
Now that you know how to handle your babysitting income tax in Canada, it's time to get started! Find the perfect babysitting job or babysitter near you. We also have fantastic nannies at Babysits, so be sure to use our nanny search function to find nanny services today.