Aging Advocate and Senior Care Expert
A self-employed caregiver is someone who is not employed by an agency, senior care facility, hospital, or other healthcare setting. Being self-employed can be incredibly fun and rewarding and could be the right path for an entrepreneur who enjoys caring for others.
Self-employed status requires additional responsibilities, like paying your own taxes and networking to find clients. Self-employed caregivers tend to earn more money and find greater job satisfaction once they have a stable client base.
Caregiving is a rewarding experience that has grown in importance over the years as our population continues to age. With more demand for aging services, many have found success as private caregivers in different types of settings.
If you are interested in how to become an independent contractor caregiver or self-employed caregiver, here are some important tips and details that you need to know to get started.
Types of Caregivers
A caregiver is an individual who tends to the needs of a person who requires help with their activities of daily living. Caregivers provide medical or non-medical services to the elderly, sick, or even those recovering from injury.
There are different types of caregivers out in the community so it’s important to understand the options available when one considers employment in this highly demanding career.
Below are a few different types of caregiver roles:
Respite Caregivers
A respite caregiver is someone who provides services on a temporary basis. Respite caregivers may be hired for one-time visits or a few days to relieve a primary family member or caregiver. This is useful if a primary caregiver needs to attend to a personal matter, take a break, or even a short trip.
Private In-home Caregivers
Private in-home caregivers are generally employees of a home care agency. They may have several different clients over the course of a day and help with daily activities, provide companionship, prep meals, or do housekeeping.
Assisted Living Caregivers
Assisted living caregivers work in assisted living, residential living settings, or memory care. They are employed by the company that owns the facility and are responsible for many different residents and duties during their shifts. Duties range from assisting with toileting, dressings, grooming, showers, transfers, and feeding. Memory care caregivers have had additional training and experience working with people with Alzheimer’s and related dementia.
Independent or Self-employed Caregivers
Independent caregivers are self-employed and typically don’t work for an in-home care agency or senior care setting. Independent caregivers are able to establish their own hours and caregiving schedule. They may list themselves on website directories or in-home caregiver registries but are ultimately employed by the individuals they are providing services to.
Benefits of Being a Self-employed Caregiver
There are many benefits of being a self-employed caregiver. Some of the advantages include:
- Having the freedom to choose the type of clients you work for
- You decide what your geographical boundaries are- how far are you willing to drive?
- Having reasonable control over your working hours and rates
- Being able to set your own boundaries for the types of services provided
Downsides of Being a Self-employed Caregiver
There are some downsides to being a self-employed caregiver. Some of them include:
- It can be difficult to find clients, especially when you are just getting started
- If you are self-employed, benefits like health insurance, retirement savings programs, and paid time off will not be available as an employee
- You are at risk of being liable for any injuries or accidents and will need to carry liability insurance
Private Caregiver Jobs
It can be a challenge to find a private caregiver job, especially if you have little or no experience working for private clients. However, with the right resources, training, and a little patience, you could be well on your way to a career in caregiving.
When searching for private caregiver jobs online, you will need to have your resume updated and ready to send along to prospective employers. Most job-seeking platforms will require applicants to provide the basics, such as your personal information, resume, and some references (previous companies and/or families you’ve worked for). Some job-seeking platforms may also charge a fee for their services.
Some of the most widely used job-seeking websites are:
Aside from job resource websites, you can also check out listings from sites like Craigslist and Facebook, but it’s important to be careful using free public job boards. Job forums and caregiver support forums can also help direct you to possible job openings.
Who Hires Self-employed Caregivers?
There is a wide range of clients who hire self-employed caregivers. Families looking for more affordable rates or who wish to work directly with a self-employed caregiver prefer hiring independent caregivers over agency-supplied caregivers. Some families are looking to work with just one or two caregivers for consistency in care and not a multitude of caregivers. Other families will be looking for the “perfect fit” for a loved one who may be particular about who they want in their home.
Promoting Yourself as a Caregiver
As an independent caregiver business, it is your responsibility to promote yourself and the services that you provide. Marketing is important, and understanding a few simple promotional strategies can mean the difference between success and failure.
Here are some ways you can promote your caregiving business and grow your reputation in the community:
- Create a LinkedIn account to connect with fellow caregiving professionals. Highlight your past experiences and the companies you have worked for. Ask for recommendations from past coworkers or supervisors.
- Expand your own personal network by informing friends and family of your new venture.
- Join support groups and caregiver forums to educate yourself and learn from others. If you know the answer to someone else’s question about caregiving, answer it! Your expertise will be valued.
- Consider creating a website to promote your services. A simple drag-and-drop one-page site is all you need. Once you have a few clients, ask them to write testimonials about your services that can be posted on the site.
- Produce some professional collateral like rack and business cards to pass around to interested parties.
- Post your services in the local newspaper.
- If your neighborhood has a local senior center, community center, or sharing board post your printed materials.
- Research local senior care networking groups. Many of these groups meet on a regular basis to network and educate attendees.
Putting yourself out there is not always easy, but your combined efforts will pay off. Don’t be afraid to let people know what you do, you never know who might be looking for a top-notch caregiver!
Self-employed Caregiver vs. Agency Caregiver
When you work for an agency (like in-home care or home health care), that entity acts as an intermediary between you and a potential client. In this case, the agency is the employer, and they are responsible for most of the logistics including; paperwork, insurance, bonds, and sometimes even certifications and training.
They also control details such as wage and tax statements, work hours, and employment rates.
Self-employed caregivers work independently of an agency, and they typically have more control over their working conditions, the types of clients that they’ll work for, and how much they’ll charge clients for services rendered. While in some ways there’s more control when you are self-employed, there can also be more responsibility. This means you may have to register for a business license and take care of your own taxes, etc.
When it comes to wages, the majority of self-employed caregivers charge hourly rates. According to ZipRecruiter, self-employed caregiver wages in 2022 range between $15.38 (per hour) to $40.87 hourly.
How To Become a Self-Employed Caregiver
If you want to become a self-employed caregiver, follow the steps below:
- You’ll need to acquire some training and education.
A high school diploma (or GED) is enough to get a job as a personal aide, but if you want higher wages and more clients, investing in continuing education and formal training will pay off in the long run. Take professional CNA classes to help you better prepare for a caregiving career. This kind of training can unlock higher wages and will be useful for jobs in private homes as well as healthcare settings.
- Get certified.
Self-employed caregivers with the proper credentials and certifications are virtually guaranteed to garner higher-wage caregiver positions. Certification requirements vary by state. Most states require a minimum of eight hours of training, plus a passing score on a certification exam. You can find out more details about caregiver certification through your local health office or by searching online.
- Take care of the paperwork.
Paperwork can be time-consuming, but it’s a necessary piece of the equation. If you want to succeed in being a self-employed caregiver, you can’t skip this part. You will need to apply for a business license and a federal tax ID. Filing taxes and insurance will also be your own responsibility.
- Advertise and promote your caregiver services.
As an independent contractor, you will be responsible for finding your own clients. You can advertise your services by joining caregiver registries, posting your self-employed caregiver resume on job boards or employment platforms, networking, and by word of mouth.
Self-employed Caregiver Taxes
Do you have to pay taxes on caregiver wages? The answer is Yes! Tax liabilities and federal income tax for self-employed caregivers, who the IRS defines as workers who provide in-home services to the elderly or disabled individuals, can get complicated. Tax laws for self-employed caregivers can differ depending on a number of factors.
Self-employed caregivers are responsible for their own (self-employment) taxes, as the services they provide fall under the structure of tax obligations of a sole proprietorship. Tax laws require that a caregiver must report all earnings as income on their Form 1040. They are legally obligated to pay self-employment tax (for Social Security and Medicare) and income taxes.
Federal Income Tax
Those who earn wages amounting to $2,400 or more in 2022 (this amount can change from year to year) are considered household employees. In this case, their employer (the client they work for) is liable to withhold and pay their full Social Security tax and Medicare taxes, also called the FICA tax.
The employer must withhold 7.65% from cash wages, 6.2% for their Social Security taxes, and 1.45% for Medicare. Caregivers must also pay their share of taxes, which also amounts to 7.65% of their cash wages.
You can find more information about self-employment taxes on the IRS website.
Do Family Caregivers Pay Employment Taxes?
Family members and caregivers who take care of a spouse or relative don’t owe self-employment taxes on the income he/she receives from an insurance company or state agency. However, if he/she operates a sole proprietorship caregiving business for multiple clients in addition to taking care of their relative, he/she will be liable to pay self-employment tax.
Self-employed Caregiver Tax Deductions
Self-employed caregiver tax deductions are subtracted from your taxable income. These should be itemized when filing your federal taxes. Some of the tax benefits and write-offs for caregivers include:
- health insurance premiums
- medical education and other relevant training
- medical equipment and tools
- work-related travel expenses
- marketing and website expenses
- professional services like CPAs, bookkeeping, and attorney fees
Employers of caregivers are also eligible to take tax credits or deduct caregiver wages as medical expenses. If eligible, caregiver expenses can be a medical deduction or care credit on the tax return of the employer.
To qualify for child and dependent care credit, the care recipient or dependent child in your family must be:
- a child dependent aged 13 years or below
- a spouse or dependent who is not capable of caring for themself and has lived with you for more than six months
Self-employed Caregiver Contract
To ensure all parties are on the same page, a caregiver contract or caregiver agreement must be drawn out. This is a notarized and signed contract that displays the detailed plan of the patient’s care needs. Aside from protecting both the employer (client) and the caregiver, this employment contract also helps set the expectations and boundaries of everyone involved.
Some of the important details that should be included in the contract are:
- name of caregiver and recipient
- start date
- employment status
- compensation details
- schedule of the service
- specific services to be performed (these can be modified as agreed on as care needs change)
- termination clause
Being a self-employed caregiver allows you to have more control over your career. Along with the freedom to choose your clients and set your own hours and rates are the added responsibilities of running your own business. Paying taxes, acquiring insurance, and advertising your services are just some of the tasks you’ll need to accomplish. While it can be daunting at first, holding the reins of your own career can definitely be more fulfilling in the long run.
Self-employed Caregiver Frequently Asked Questions
The IRS defines a caregiver as someone who provides medical or non-medical help to an elderly or disabled individual. They can be a household employee of the qualifying person or family they work for or are self-employed and work independently.
Complete caregiver training and take CNA classes to help leverage your business. Make sure to take care of all the necessary paperwork to make your service legal. Get your name out there by advertising your business online, networking with senior care professionals, and creating a robust LinkedIn profile.
Rates for self-employed caregivers vary, depending on factors such as the state they work in, experience, and services provided. According to ZipRecruiter, the average rates for self-employed caregivers in the US range between $15.38 – $40.87.
There are many ways to advertise your caregiving services. You can join caregiver registries, post in job portals, and by word of mouth. Expand your social media presence and join caregiver forums and online support group communities.
Amie Clark, BSW
Aging Advocate and Senior Care Expert
Amie has worked with older adults and their families for the past twenty-plus years of her career. Her senior care knowledge is based on her experience as a social worker, family caregiver, and senior care consultant. Learn more about Amie here.
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