Hiring without declaring, it's risky!

Undeclared work is the failure to declare your employee's earnings to the CRA. The idea may seduce you to the overall cost of your employee, no payroll taxes to pay, it is a one heck of an economy...
It can seduce your nanny who has no papers or who wants to earn unemployment benefits and a salary or who is on parental leave and wants to continue to receive aid... And yet, hiring your nanny "off the books" is risky, and finally not that beneficial.

The dangers of undeclared work for the nanny

Although the nanny might "save" money by not paying income tax or payroll remittances she will lose out in other ways and be in a less secure position.

Your nanny will  not be contributing to her retirement; nor to her Employment Insurance (meaning she can't collect if she gets laid-off). If your employee receives in addition to his pay unemployment benefits or other government income assistance, she may be ordered to repay all she has received.

The dangers of undeclared work for the employer

Being reported to the authorities, it happens more often than we think. If it's really all about the money you'll save remember that you won't be eligible for tax benefits or other aid, as explain The Urban Daddy on his blog.

But often it's your nanny who will report you as she has every incentive to do so in order to receive employment benefits.

The financial risk of not declaring is great. You must pay  :

• Backed taxes, CPP and EI payments (employer and employee) with interest.
• Penalties and possible fines,

You will also not be eligible for tax benefits or provincial subsidies to help with the cost of care. In addition you could be faced charged with tax evasion.

Good reason to declare:

* Being able to receive financial, and get the tax benefit!

* Declaring isn't that difficult. Easy-to-use payroll software is available or you could hire a service to take care of it for you.

* Declaring your nanny is respecting her... it's better to build a good relationship with her!