For business owners

Pay your kids for real work, and keep it in the family.

When your child does genuine work for your business, you pay a fair wage. The business deducts every dollar, and up to the standard deduction the child owes no income tax.

Watch the quick version

See how it works through one simple example.

Is this you?

Your child does real, age-appropriate work in your business.
The work must be real and the wage reasonable for the job.

Here is the idea, in plain words

You pay your child a fair wage for real work, and the business deducts every dollar.

Up to the standard deduction, the child owes no income tax on those wages.

The money shifts from your high bracket to the child's zero bracket, and stays in the family.

What this could be worth

Move wages from your bracket to your child's zero bracket, deductible to the business.
  • 1Give your child real, age-appropriate tasks.
  • 2Pay a reasonable wage and keep payroll records.
  • 3The business deducts the wages; the child owes little or no tax.

Educational guidance, not tax advice. We confirm every figure and your eligibility before you act.

Ready?

See your real family wages savings

Connect your account and we confirm your eligibility and the exact numbers.

Connect my account
🔒 Read-only access ✓ We never move your money 🛡 Secured by Plaid

Free to check. Nothing happens until you say so.

What to watch out for

The honest version.

  • The work must be genuine and the pay reasonable for that work.
  • Keep timesheets, job descriptions, and proper payroll records.
  • Payroll-tax treatment depends on your business structure.

Common questions

Is this legitimate?

Yes, when the work is real and the wage is reasonable, with proper records.

How much can they earn tax-free?

Up to the standard deduction, the child generally owes no federal income tax.

What records matter?

Timesheets, a job description, and standard payroll documentation.

← Back to all tax guides
See your number

Find out what you're overpaying, free

Connect an account or upload last year's return. No card to get your number.

Find my savings