Day care providers with helpers generally use some kind of payroll service. Or they may avoid payroll issues altogether and improperly giving their worker a 1099-MISC at the end of the year, rather than the required Form W-2. Unfortunately, the 1099 approach can backfire and cost you more than treating your helpers as proper employees.

Some child care providers have taken on the payroll paperwork themselves. Read my Payroll Tax Guide to see what that entails.

Many, if not most, providers with helpers are dissatisfied with their options. It's risky to neglect payroll paperwork, but payroll services can charge $60 (or more) every payday. On the other hand, it's complicated and time consuming to handle the payroll tasks yourself.

Over the last several years I have encouraged many family child care providers to treat their helpers properly as employees, but I have not found a satisfactory payroll service to recommend.

For this reason, I launched my own daycare-specific payroll tax service for California child care providers on January 1, 2010.

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Family Child Care Taxes provides Full Service Payroll for $60/mo - Only $45/month through Dec 2010

Full Service leaves all your payroll tasks to us, except that you write the actual paychecks. You enter employee hours through our secure website every two weeks for paydays that fall on every other Friday.** We calculate your employees’ tax withholding and net paychecks and email you their paycheck stubs. We determine your payroll tax deposits and advise you via email the amount to be withdrawn from your bank account. At the end of each quarter, we prepare and submit your payroll tax returns, providing hard copies for your records. At the end of the year, we issue Forms W-2 to your employees.

**Note that per California labor law, child care workers must be paid at least twice per month. I have run into some providers who pay their employees only once per month, to save time and money, but this is not allowed.

Last updated 27 April 2010

Posted on 2009-11-21 23:08:12