💡 Tip Tuesday: How to Hire Your Kids in Your Business (Legally and Smart)

Hiring your kids isn’t a loophole—it’s a strategy.

Smart CEOs pay their children for real work, teach them business skills early, and lower their tax burden legally in the process.

Here’s how to make it happen the right way.

👩🏾‍👦 Step 1: Assign Real Roles

Your child must provide legitimate work for your business.

Think:

-Social media assistant

-Office organizer

-Content model for your boutique

-Flyer distributor

-Admin help

Keep it real. If your business benefits from their contribution, they can be compensated.

-The IRS allows business owners to hire their children and pay up to $13,850 per year tax-free (2025 standard deduction)—if structured correctly.

-If your business is an LLC or Sole Proprietorship, wages paid to your child under 18 aren’t subject to Social Security or Medicare taxes.

-If you’re taxed as an S-Corp or C-Corp, you’ll need to process payroll through your business just like any employee.

📘 Reference: IRS Publication 15: Employer’s Tax Guide

You’re the CEO, not Santa Claus—so treat it like business.

-Create a written employment agreement

-Track hours worked and tasks completed

-Issue pay stubs or document payments through your business account

-File a W-2 or 1099 depending on structure

***Pro Tip: Open a Roth IRA or custodial savings account in their name and deposit part of their earnings. That’s generational wealth in motion.

Let your child see invoices, talk about taxes, and help with small budgeting tasks.

They’re learning how money moves before adulthood hits—and that’s a bigger gift than any allowance.

Hiring your kids isn’t just about saving on taxes. It’s about showing them that ownership is normal.

Want to set up your business the right way so you can hire family confidently?

today and create a business that builds legacy, not stress.