Give Your Family a Financial Boost: Hiring Your Child in Your Family Business
Running a small business or side hustle? If you include your child in the team, you could unlock real value not just for the business, but for your entire household. This isn’t about taking advantage it’s about strategic support, giving your child a meaningful role and your family access to benefits that many don’t know about.
Why It Matters for Families
When you hire your child, you’re doing more than “just work.” You’re:
Instilling responsibility and work ethic in your child.
Keeping the income within your household.
Using a legal strategy to reduce taxes and strengthen your business’s financial health.
For many moderate-income families, every dollar counts. By making smart moves like this, you’re not just building a business you’re building legacy.
The Big Tax Advantages (Yes, They’re Real)
Here are some of the key benefits when you hire your child (and yes, the rules must be followed):
Deductible Wages: If your business pays your child a fair wage for real work, that expense can often be deducted.
Youth & Tax‐Savings Combo: In certain cases, younger children’s wages may not be subject to Social Security or Medicare taxes (depending on your business structure).
Child Gets Earned Income: Your child can build their own tax history and possibly shift income into a lower tax bracket.
Family Income Shift Opportunity: Instead of income being taxed at your higher rate, some of it goes to your child’s wage potentially taxed at a lower rate.
Getting Ahead for the Future: The child is participating, learning business, gaining experience and you’re teaching real value.
What It Takes to Do It Right
This isn’t about just writing a check to your kid. To keep it legal and beneficial:
Have your child actually perform legitimate work in the business (office help, bookkeeping, social media, whatever fits).
Pay a reasonable wage for the work done and keep records (timesheets, job description, wage payment).
Ensure you follow all labor laws (state minors’ work laws, hours, etc.).
Use the proper tax forms: treat your child as an employee (W-2, if appropriate), maintain payroll records.
Be honest and consistent if you’re audited, this should look like real employment, not a “tax trick.”
How It Helps Your Household Right Now
When done correctly, hiring your child can bring real, tangible benefits:
You reduce your business’s taxable profit (which may lower your overall tax bill).
You help build your child’s financial awareness and work ethic.
You create a family culture of financial responsibility your child sees, participates, and benefits.
The wages your child earns can be saved or used for their future—college, first car, next steps—while you’re still building today.
A Few Cautions & Things to Ask
This strategy works best when the business is legitimate and profitable. If the business isn’t active or earning, it may raise red flags.
Make sure your child’s work has real value and the wage fits local norms. Too high or too little can be problematic.
Always check evolving tax law, what works today may shift tomorrow.
State and local child labor laws vary some have stricter rules for minors.
Your Next Step
Start with something simple:
Identify a role your child can fill (data entry, social posts, light support).
Set an hourly wage that’s fair and within business norms.
Keep a simple log of hours and work done.
Pay your child via payroll or check, and deposit into their account.
Use this as a learning moment—teach your child about income, savings, and why we do this.
Bottom line: Families have power when they use smart strategies together. Hiring your child for your business isn’t just about tax breaks it’s about family investment in work, learning, and legacy. You’re not just managing money, you’re building opportunity.
Educate. Empower. Evolve.
Your family’s future starts with intention. Let your business and your household rise together.