Paying children to work in your nursery.

Regarding how to pay your homeschool workers when you haven't even started making a profit yourself yet.

Can you afford to buy pizza and soda?  Think of it like a moving day when you ask friends to help you load your uHaul truck all day long on a Saturday.  You treat them to pizza and endless beverages.  This would really only work for a single long day's worth of work – but if you prep for it you could get an assembly line going that is remarkably productive and each person only needs to know their own part well.  That's how my kids and I pack and ship plants so efficiently.  Assembly lines!  My sister raises meat chickens by the hundreds and twice and year she calls anyone and everyone who can to come help do the slaughtering and butchering.  Again, assembly lines!  She feeds us, we have fun, we take pictures and post 'em on facebook, but that's it.   No money needed.  Sometimes she and her family come here and help us fell trees, cut them into rounds, and split and stack wood all day long on a Saturday to help us get ready for winter (we have an outdoor woodburning furnace that heats our house and our hot water),  Again we just feed them and try to have fun while we work. Oh, and it's not just family either, we do the same with many of our friends as well.  

However if the employment is on-going you may need to pull out your wallet.  First ask the children's parent what they would suggest in the way of wages.  My dad has paid my kids to work for him in the past and each child had their own hourly wage rate based on a system my dad and I worked out together.  Even the 4 year olds got a handful of quarters in payment for fetching and carrying for us out in the hot sun.  (I got so many moneys mama!).  Kids have a very short window for effectively encouraging good behavior, so I suggest that you have lots of cash/coins onhand BEFORE the work day so you can pay them on the spot everyday that they work for you.  Getting paid by check a week later, feels to them, like they did all that work for nothing.  So, pay immediately and in cash!  The closer the reward is to the job done, the more likely they are to repeat the desired behavior.  Also, my older daughters often request to be paid via paypal, since they each have student paypal accts with debit cards which give them instant access to their funds.

If the children are family members then it counts as a family "farm" business according to the IRS.  Which means you can pay them up to I think $1200 in a single calendar year without having to file a 1099 form for each child.  You can still deduct it as a business expense on your own taxes though.  Might want to check with a tax preparer to get the official gross wages limit in case my number is wrong.