Best Tools for Documenting Family Employment (2026)

What You Actually Need

Before comparing tools, let's be clear about what the IRS actually requires:

• Employment agreement: Written terms of employment
• Work logs: Records of when work was performed (contemporaneous)
• Payment records: Proof of payments made
• W-2: Issued at year end to report wages

Notice what's NOT required:

• Full payroll software
• Direct deposit
• Automatic tax withholding

The IRS wants proof that the work happened and was paid for. They don't care which software you use.

The Options Compared

= Included | = Partial/Manual | = Not included

employkids

What it is: A documentation tool built specifically for families hiring their kids.

What it does:

• Generates employment agreements with electronic signatures
• Tracks work with server timestamps (audit-proof)
• Records payments by any method
• Creates one-click year-end tax packet
• Tracks Roth IRA contribution eligibility
• Maintains full edit history for audit trail

Pricing:

• Home: $299/year for household work (cleaning, yard work, pet care)
• Pro: $499/year for business owners (adds wage expense summary, business documentation)

Best for: Families whose primary goal is documentation and Roth IRA funding, not running a full payroll operation.

Limitations: Doesn't process actual payroll, file W-2s with SSA, or handle direct deposit. You pay your kids however you want; employkids documents it.

DIY Spreadsheet

What it is: Google Sheets, Excel, or any spreadsheet you maintain yourself.

What it does:

• Whatever you set up
• Can track work and payments
• Can create custom reports

Pricing: Free

Best for: DIY enthusiasts who are disciplined about updating regularly and comfortable creating their own documentation.

Limitations:

• No server timestamps: You can edit any cell at any time. There's no proof of when entries were created.
• No audit trail: Previous versions aren't preserved by default
• Manual everything: You create all documents from scratch
• Harder to defend: In an audit, an IRS agent knows spreadsheets can be backdated

Our honest take: Spreadsheets work if you're disciplined and accept the audit risk. But most families aren't disciplined about updating weekly, and when tax time comes, they reconstruct records, which defeats the purpose.

Gusto

What it is: Full-service payroll software designed for small businesses with employees.

What it does:

• Runs payroll on schedule
• Calculates and withholds taxes
• Files W-2s and other tax forms
• Direct deposit to employees
• Benefits administration

Pricing: Starting at $40/month + $6/employee/month. For one child, that's ~$46/month or $552/year.

Best for: Businesses that already run payroll for non-family employees and want to add kids to the same system.

Limitations for family employment:

• No work logging: You still need to track what work was done separately
• No employment agreement: You create that yourself
• No Roth IRA tracking: That's not what payroll software does
• Overkill for 1-4 kids: You're paying for features you don't need

Our honest take: Gusto is excellent payroll software. But if you're only hiring your kids, you're paying for payroll processing when what you need is documentation. Gusto processes payments; employkids documents work.

QuickBooks Payroll

What it is: Payroll add-on for QuickBooks accounting software.

What it does:

• Everything Gusto does
• Integrates with QuickBooks accounting
• Same-day direct deposit option

Pricing: Starting at $50/month + $6/employee/month. ~$56/month or $672/year for one child.

Best for: Businesses already using QuickBooks who want integrated payroll.

Limitations: Same as Gusto: no work logging, no employment agreements, no Roth IRA tracking.

Our Recommendation

For most families hiring 1-4 kids: employkids

Purpose-built for this use case. Server timestamps, audit trail, employment agreements, and a complete tax packet. $299/year is less than what you'd pay a CPA for 2 hours of work—and the CPA would still need you to bring documentation.

For DIY enthusiasts: Spreadsheet (with caveats)

If you're disciplined and accept the audit risk, a spreadsheet can work. Use Google Sheets with version history enabled. Update weekly, not at year-end. Create your own employment agreement and W-2 worksheet.

For businesses with other employees: Add kids to existing payroll

If you're already running Gusto or QuickBooks for other employees, add your kids to the same system. Just remember that payroll software doesn't create work logs—you still need to document what work was performed.

Frequently Asked Questions

Do I need payroll software to hire my kids?

No. Full payroll software like Gusto is overkill for most families hiring their kids. You need documentation, not payroll processing. A purpose-built tool like employkids is more appropriate.

How much does employkids cost?

employkids is $299/year for the Home plan (household work) or $499/year for the Pro plan (business owners). Both include unlimited children and the complete tax packet.

Can I just use a spreadsheet?

You can, but spreadsheets have no server timestamps and can be edited at any time. In an audit, this makes them less defensible than purpose-built tools with audit trails.

What if I already use Gusto?

If you already run payroll through Gusto for other employees, you can add your kids. Just remember that Gusto doesn't track work—you still need to document what tasks were performed and when.

Does employkids file my taxes?

No. employkids is a documentation tool, not a tax filing service. We provide a W-2 worksheet with all the data you need—you or your CPA uses that to file the actual W-2 with the SSA.