Families hiring a nanny have many things to consider, including whether or not the nanny will be driving the kids, if she or he will be using their own car, and whether the nanny will be purchasing anything for the family such as food, art supplies, etc. Some families may give cash to the nanny for such expenses, but if the nanny uses his or her own money, expense and/or reimbursement reports may be required. Here’s how to handle expense reports for nannies.
A family should detail—in their employee handbook or work agreement—the process a nanny or other employee must follow for reimbursement of work-related expenses or disbursement of spending money for an upcoming event. As part of the process, it is helpful to stipulate that an expense report must be submitted each month, fiscal quarter, or after an event, and whether the employer requires the original sales receipt or a photocopy of the sales receipt.
Also, employers may include guidance on the minimum dollar amount when an original sales receipt or photocopy of the sales receipt is required. For example, if the employer requires a receipt for purchases over $10, then if a nanny spends $2 on an ice cream bar for a child at the playground, a receipt is not mandatory. However, if a personal assistant spends $12.50 on office supplies, then a receipt must be attached to the expense report.
A list of approved employer-covered expenses should be included within the employee handbook or work agreement and amended as necessary. To ensure clarity, some employers also include a list of expenses that are not covered. For instance, some employers may cover an employee’s mileage, tolls, and parking, but not maintenance costs or gas (which is actually included in the mileage reimbursement rate).
Some employers may cover the costs of work-related cell phone calls, but not the cost of the cell phone or its monthly service charge. The handbook and the expense reimbursement form may include a clearly worded sentence recommending that an employee with any questions regarding reimbursement and employer-covered expenses check with the employer regarding coverage approval prior to the event or task.
Have more questions about hiring a nanny or being a household employer? Call us at (518) 348-0400 and let us know how we can help!