The assistance of an at-home helper can be invaluable. But keeping track of their payments and complying with various legal requirements can create a hassle. That’s where HomePay can step in to help.
If you're hiring a babysitter, home health aid for a relative, or even a pod teacher, HomePay can help you pay them the right way and be compliant.
The comprehensive tool is worthwhile to consider as you manage your at-home help. Here’s everything you need to know about HomePay.
- Simplifies payroll processing for household employees
- Calculates, files, and sends federal and state taxes
- Provides unlimited HR and tax audit support
Tax and payroll management for household employers
What Is HomePay?
HomePay is a nanny payroll service that can help you manage the responsibilities of hiring and paying in-home employees.
Although the company was recently rebranded in 2012, the basis of these systems has been around for much longer. HomePay was created when the decades-old payroll service designed for household employees, Breedlove & Associates, sold their business to Care.com. Breedlove & Associates was founded in 1992 so they’ve had decades to perfect this process.
The goal of HomePay is to help you handle the payroll obligations of your household employees. With that, you won’t have to handle the process of removing taxes from your employee’s paycheck. It can be a major time saver!
How Does HomePay Work?
Curious about HomePay? Here’s how it works.
To get started, you’ll set up your employee’s wages and hours. After that, you’ll have to regularly review your summary pay period emails to make sure that the hours match up. But otherwise, Homepay handles the payroll process.
The beauty of HomePay is that all of the nitty-gritty details of payroll will be taken care of. It will even detail the amount of taxes withheld from your employee’s regular paycheck.
You will have to check in each pay period to verify your employee’s hours before payment. But this is only task that you'll have to do. You won’t have to deal with any other payroll concerns.
Beyond this payroll assistance, HomePay will run state and federal payroll calculations, provide year-end tax documents to you and your employee, provide accessible archives of these tax documents, and provide your employee with a physical paycheck or direct deposit on payday.
Remember, you can use HomePay for any and all of your household employees. Whether you work with a nanny or employ a home health aide for a relative, this system is designed to handle the paperwork avalanche of that decision for you.
On-Boarding Assistance And Ongoing Support
With HomePay, you'll have unlimited phone, chat, and email support to help you get answers to any of your payroll or tax questions. You'll also receive support during the on-boarding process for new employees. And once employees have been added to your household, they'll receive unlimited support as well.
Finally, HomePay will serve as a communication corridor between you and the IRS. You don’t have to worry about wading through a tricky audit alone. Homepay will be there to help you navigate any tax issues related to your household employees.
How Much Does It Cost?
HomePay costs $75 per month. But the monthly rate is billed quarterly ($225 per quarter). That adds up to $900 for the year.
There's also an optional add-on of $100 for end-of-year tax filing services. All in all, using HomePay will cost between $900 to $1,000 for the year.
Should I Use HomePay?
HomePay provides a worthwhile service. If you have household employees that you pay more than $2,300 per year, then it is worth considering this option. Time is a valuable commodity and you probably don’t want to spend it dealing with the administrative responsibilities that come along with household employees.
But if you have infrequent household help that you pay less than $2,300 per year, then you don’t really need HomePay’s help. At that payment threshold, you're not considered their employer, according to the IRS.
Another instance when you won’t need the help of HomePay is if you work with a care provider out of their home. If the care is happening in their home, then they're considered self-employed and you aren’t responsible for their payroll taxes.
The decision to work with HomePay or not will depend on your unique situation. If you have a household employee (or multiple employees) that you pay thousands of dollars to each year, then HomePay could handle the administrative burden for you.
This could be especially helpful if you're a busy person. Weigh the costs of the service with the time you could save. Many household employers may feel that $75 per month is a fair price for the comprehensive service. But ultimately you’ll have to decide if HomePay would be worth the cost for you.
Remits Federal And State Taxes
Communicates With State Agencies
Manages IRS Notices
Files New Hire Report
Files Year-End Taxes
Not automatically, but it can for an extra fee
Generates Pay Stubs
Mobile Payroll Processing
PTO Accrual Tracking
Can help household employers obtain a workers’ compensation insurance policy through a leading broker and A-rated underwriter.
Cost For The Employer
$75/month (billed quarterly)
Cost For The Employee
Cost Of Optional Year-End Tax Filing
Customer Service Options
Unlimited phone, chat, and email support
Customer Service Number
Customer Service Hours
Mon – Thurs, 8 AM – 6 PM (CT)
Mobile App Availability
Ease of Use
HomePay is an online tax and payroll service that can help you manage the responsibilities of hiring and paying household employees.
- Files state and federal taxes
- Unlimited concierge support
- Process payroll on any device
- Decades of experience
- Steep monthly cost
- Extra costs for year-end tax filing
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.