Payroll Examples

One of the biggest deterrents to hiring a live-in caregiver is the delusion that it would cost a fortune to have a live-in caregiver. The following example of a typical caregiver's earnings and deductions helps dispel this widely-held misconception.

Live-in Caregiver's Payroll Details
Pay period type
Monthly
Gross pay*
$1,412
Statutory payroll deductions:
Canada Pension Plan (CPP) contribution
55
Employment Insurance (EI) premiums
25
Income tax deductions
93
Total deductions
173
(173)
Remaining gross pay
1,239
Room and board deductions
(369)
Net pay to employee
$870
Employer's statutory contribution
+90
Total remittance to Canada Revenue Agency (CRA)
263
+263
Total payroll expenses
1,133
Employer's income tax saving**
(195)
Net cost to employer
$938
* The gross pay is based on a 32.5-hour work week for a live-in caregiver in Ontario where the prevailing wage rate is $10.56 per hour.
** The tax savings are based on CRA's tax tip and a conservative assumption that the employer family has only ONE child under the age of 7 and the secondary income earner makes about $50,000 per year (thus the marginal tax rate is about 33%). If the family had TWO children, the tax savings would be close to $400 per month and the employer's monthly cost would be only $700 something!

Note:
1. Although other provinces have different wage rates and tax rates, the monthly cost for the employer to have a live-in caregiver is not significantly different.
2. A live-in caregiver's wages can also be claimed as attendant care expenses and result in similar income tax savings for a family that hires the caregiver to care for the frail elderly, the chronically ill or people with disabilities living at home.



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