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Hiring a nanny feels like a favour between friends, right up until the first payday. Then the questions pile up. Do I take CPP off? Who sends what to the CRA? Is “$25 an hour” before tax or after? Here’s the short version: in Canada, a nanny who works in your home, on your schedule, is almost always your employee, which makes you an employer, even if your “workplace” is a kitchen with a toddler in it. The paperwork is smaller than it sounds. For a nanny paid $25 an hour for 40 hours a week in Ontario, the family pays about $2,157 every two weeks all in, which is roughly $28 for every hour worked, not $25. Plug in your own numbers with our nanny payroll calculator, which some folks search for as a nanny paycheck calculator, then come back for the how and the why.
Is a nanny really an employee?
Almost always, yes. The CRA looks at who controls the work: who sets the hours, who decides what gets done, whose home and tools are used, and whether the worker can make a profit or take a loss. A nanny who shows up when you ask and follows your routine doesn’t have a business of her own. Calling her “self-employed” just to skip the deductions won’t hold up if the CRA ever asks, and you’d owe the missed CPP and EI plus penalties. Not worth the stress, eh?
What do you owe on top of the wage?
Three things come out of the nanny’s pay, and two of them are matched by you.
| Item | Held back from the nanny | You add |
|---|---|---|
| CPP | 5.95% of pay above $3,500, up to $4,230.45 a year | The same amount |
| CPP2 | 4% of pay from $74,600 to $85,000 | The same amount |
| EI | 1.63% of pay up to $68,900, so $1,123.07 at most | 1.4 times her amount, up to $1,572.30 |
| Income tax | Federal and provincial, based on her TD1 forms | Nothing, you only forward it |
Those are the 2026 figures outside Quebec. A few exceptions: a nanny under 18 or over 70 pays no CPP, and if she’s your parent, child or sibling, EI usually doesn’t apply.
What does it cost in real life?
Take Maria, a nanny in Ontario at $25 an hour, 40 hours a week, working 50 weeks with 4% vacation pay on top, which adds up to a full paid year. Paid every two weeks, here’s the split.
| Per two weeks | Amount |
|---|---|
| Gross pay | $2,000.00 |
| Income tax held back | $254.82 |
| CPP held back | $110.99 |
| EI held back | $32.60 |
| Maria takes home | $1,601.59 |
| You add CPP and EI | $156.63 |
| You send the CRA | $555.05 |
| Your full cost | $2,156.63 |
That’s $56,072.39 a year, or $28.04 for every hour she works. Budget for the second number, not the first, and March won’t ambush you.
Can you pay a nanny “net”?
Lots of families do. “I’ll give you $880 a week, clean” sounds simple, but you can’t just add deductions on top of $880, because tax is figured on the gross. In Ontario, a nanny who wants $22 an hour in her pocket needs about $27.73 an hour gross. That’s $1,109 a week before deductions, and the family’s all-in cost is about $1,197 a week, or $31.11 per hour worked. Switch the calculator to take-home mode and it works backwards for you.
How do you set up payroll, step by step?
- Register a payroll account with the CRA. You need a business number and an RP account, but you don’t have to incorporate anything.
- Collect the paperwork. Her Social Insurance Number and a signed TD1 form. Our guide to SIN, ITN and BN numbers explains what’s what.
- Write down the deal. Hours, rate, vacation, holidays, sick days, notice, and who covers gas if she drives the kids.
- Calculate each paycheque. The CRA’s own tool does it, and our piece on the CRA PDOC calculator shows how.
- Send the money in. Most small employers pay by the 15th of the next month, though your CRA account has your own schedule. See our CRA payroll guide.
- File a T4 by the end of February. Here’s how to read a T4.
- Issue a Record of Employment when she leaves, within five calendar days after the pay period ends.
If you’d rather skip the admin, a payroll service can run steps four to six for a small monthly fee.
What does your province say?
This is where Canada gets messy, because nannies fall under provincial law. A quick tour of what we found in the official sources:
- Ontario: full employment standards. Overtime after 44 hours a week, nine public holidays, and WSIB coverage once she works more than 24 hours a week.
- British Columbia: overtime after 8 hours a day and 40 a week, five paid sick days, a written contract, and WorkSafeBC from 8 hours a week.
- Alberta: domestic employees get no overtime, but you still pay every hour. A live-in nanny must earn at least $2,848 a month.
- Quebec: overtime after 40 hours, unless she only looks after the kids.
- Saskatchewan and Manitoba: a Saskatchewan “care provider” is exempt from minimum wage and overtime; a Manitoba nanny who lives out is mostly outside the Code.
- New Brunswick: a private-home worker isn’t covered by the Act at all. Nova Scotia only covers more than 24 hours a week. Newfoundland and Labrador covers her fully, with overtime after 40 hours.
- PEI and the territories: PEI’s new Act from June 2026 treats an ordinary nanny under the general rules, including overtime after 44 hours. The Northwest Territories requires a written contract for a domestic worker.
Vacation pay is usually 4%, going to 6% after a few years, and Saskatchewan’s three weeks works out to about 5.8%. Try the vacation pay calculator, holiday pay calculator and provincial minimum wages for your own numbers. Our nanny calculator picks the overtime, vacation and minimum wage for the province you choose.
What about Quebec?
It’s its own world. The QPP replaces the CPP, a parental insurance premium called QPIP is added on both sides, EI premiums are lower, and you register with Revenu Québec as well as the CRA. The calculator splits what you send to each agency, so you know where every dollar goes.
What can you claim back?
Here’s the part that makes the bill easier to swallow. What you pay a nanny so you can work can count as child care expenses, and the lower-earning parent usually claims them. The yearly limits are $8,000 for a child under 7, $5,000 for a child aged 7 to 15, and $11,000 for a child eligible for the disability tax credit, capped at two thirds of the claimant’s earned income. Keep receipts and her SIN. Your share of CPP and EI counts too. Quebec families get a refundable credit instead, so check Revenu Québec.
What goes wrong when you pay cash and skip the paperwork?
Under-the-table pay isn’t the bargain it looks like. You can owe the unremitted CPP, EI and tax plus penalties and interest. Your nanny builds up no CPP, EI or maternity benefits and no record of income, which bites when she applies for a mortgage. And you can’t claim child care expenses without receipts and her SIN.
The bottom line
Pay your nanny properly, write it down and budget for the real cost, which is usually 10 to 15 percent above her hourly rate. Then run it through the nanny payroll calculator or the payroll remittance calculator and sleep easy.
Where the numbers come from
The 2026 CPP, CPP2 and EI figures come from the federal payroll tables, and the provincial rules from each government’s employment standards pages, all read on 2 October 2026. A few PEI and Nunavut details could only be read in part, so confirm those with the province. The examples use the same data as our calculators. This website provides information only, offers no payroll or tax preparation services, and isn’t connected to the CRA or any other government body.
- CRA: employing a caregiver, baby-sitter or domestic worker
- CRA: CPP contribution rates, maximums and exemptions
- Service Canada: EI premium rates and maximums
- Ontario: domestic workers
- British Columbia: hiring domestic workers
- Alberta: domestic employees
- CNESST (Quebec): domestic workers
Frequently asked questions
How do I calculate my nanny's paycheque?
Start with her gross pay, hold back income tax, CPP and EI, and pay her the rest. You add your own CPP and EI share on top. The nanny payroll calculator does all of it for your province.
Do I have to pay CPP and EI for my nanny?
Yes, if she is your employee. CPP is 5.95% each from you and her above $3,500, and EI is 1.63% from her and 1.4 times that from you. A nanny under 18 or over 70 pays no CPP, and EI usually does not apply to a close relative.
Can I pay my nanny a take-home amount?
Yes, but the tax is worked out on the gross, so you have to gross it up. In Ontario, $22 an hour after deductions needs about $27.73 an hour before deductions.
Does my nanny get overtime and vacation pay?
It depends on the province. Ontario pays overtime after 44 hours a week, British Columbia after 8 hours a day and 40 a week, and Alberta has none for domestic employees. Vacation pay is usually 4%, rising to 6% after a few years.
Can I claim a nanny as a child care expense?
Often yes. The lower-earning parent can claim up to $8,000 for a child under 7 and $5,000 for a child aged 7 to 15, up to two thirds of their earned income, with receipts and the nanny's SIN. Quebec has a refundable credit instead.
What happens if I pay my nanny in cash?
You can owe the unremitted CPP, EI and tax plus penalties and interest, and she builds up no CPP or EI. You also cannot claim child care expenses without receipts.
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Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.