The Payroll Blog

News, tips, and advice for small business owners

What Are Learning Pods and Nanny Shares?

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Stephanie Davis

As many families are preparing for the back to school season, there are plenty of questions about how the school year will work given the COVID-19 pandemic.

Three children doing schoolwork on computers with a nanny.

With the economy still unsteady, many continuing to work from home, others working on the front lines, and some still looking for work, parents are struggling with how to juggle remote learning for their children. Because of these struggles, learning pods are starting to pop up. Are you wondering what they are and how they could work for your family? We explain learning pods, nanny shares, and how to pay for these learning arrangements accurately below.

What is a Learning Pod?

A learning pod is a small, in-person group of students who are supervised by a private teacher or tutor. These learning pods are created by several parents and share the cost of the private teacher or tutor. The teacher or tutor will work with the student’s school curriculum and help them with their homework assignments and e-learning work. This learning situation is a relief to working parents who don’t have the time to help their children with remote learning. Additionally, it provides safe socialization for the students.

What is a Nanny Share?

Another top search these days is for a nanny. For many families, this is the first time they have tried to find a nanny and aren’t sure how it works or where to begin. Similar to learning pods, parents are opting for nanny shares where a few families will share a nanny to watch their children together. Nanny shares can also be divided by homes, meaning a nanny could watch the children of one family two days a week, and the other family the remaining days.

Payment Considerations for These Learning Options

If you’re going one of these routes for the school year, the next thing you’ll have to figure out is payment. How much you pay your nanny or private teacher will be impacted by various considerations such as how many children they will be watching, the duration of the services, and the area you live. Depending on how you’re implementing these plans, payment will vary. With some learning pods or nanny shares, you may be working directly with a company or agency and agree on a set fee. For those situations, you’ll just work with the group directly. However, if you choose to hire a nanny or babysitter or tutor on your own, there are some important things you need to know.

  • Becoming a household employer. When you decide to hire a nanny or tutor, you are signing up to be a household employer. This means no cash under the table, gathering important tax documents from your new employee and running payroll on a set schedule.
  • The Nanny Tax. The biggest thing to know when paying your new nanny, or tutor in this case, is the nanny tax. If you will be paying your new employee more than $2,200 in wages for the year, you are required to withhold and pay Social Security and Medicare taxes. If you will be paying more than $1,000 per quarter, you are also required to pay federal unemployment tax (FUTA). Because of these tax considerations, similar to the point above, you can’t pay cash wages. While they may seem like the easiest method for all parties involved, it can negatively affect you, the other families you’re working with, and your new employee.

Working With Other Families and Online Payroll Providers

All families of the nanny share or learning pod must be on the same page when it comes to payment. If there is somebody in the group who is knowledgable about payroll and taxes and has the time to follow  DIY payroll method, that’s a win. However, if you’re all choosing to get outside help for your kids, opting for an online payroll service may be the best. Before you go that route, there are some things you’ll want to know or consider.

  • Multiple accounts. Because everyone involved will be considered a household employer, everybody will need an account with the payroll company. They will be able to help you and ensure that everybody is withholding and paying the proper amount of payroll taxes. You can’t just have one account and let the other members Venmo you or pay cash.
  • Access to help. If this is your first time being a household employer, you’re going to have a lot of questions. Look for a payroll company that offers resources, a variety of ways to get help, including phone and online chat functions. It’s a bonus if they are available non-standard hours like nights and weekends too. For the challenging times, like COVID-19, you’ll want a payroll company that keeps you informed on changing tax laws and regulations so you’re in the know and compliant.
  • Ease of payroll. Times are busy, and you’ll all need the help you can get making sure that payroll is easy. Look for nanny payroll providers who have a mobile app so you can run payroll easily on the go.

Bottom Line

Back to school is not the way we once know it. Times are already challenging, and the last thing you want is to be investigated by the IRS for inaccurately paying for your student’s learning. Make sure you do your research before starting a learning pod or nanny share and follow the proper payroll and tax protocols once you do start.

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This website contains articles posted for informational and educational value. SurePayroll is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, SurePayroll. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. If you require legal or accounting advice or need other professional assistance, you should always consult your licensed attorney, accountant or other tax professional to discuss your particular facts, circumstances and business needs.