Industries
Accounting and Payroll for Home Care Agencies
Caregivers work in clients’ homes, across long and irregular hours, for an agency paid on someone else’s timetable. Every hard problem in this sector comes from one of those three facts.
Caregivers are employees, and the hours are complicated
An agency that assigns caregivers to clients, sets the schedule and directs the work has employees, not contractors. The fact that the work happens in a private home does not change it, and this is a sector where the classification is examined.
What makes payroll harder than the classification is the hours. Overnight shifts, live-in arrangements, split shifts, sleep time, travel between clients — each has its own treatment for pay and overtime purposes, and the rules governing domestic and companionship work have changed in ways that caught many agencies out.
Travel between clients during a shift is generally compensable working time. Agencies that pay only for time in the home, and treat the drive between as the caregiver’s own, are usually wrong about that and accumulating a liability while they are.
Paid on someone else’s schedule
Caregivers are paid weekly or fortnightly. Agencies are paid by private clients on terms, or by a programme on a reimbursement cycle that can run considerably longer. That gap is the defining financial pressure of the sector — an agency can be profitable and still unable to make payroll, and the two facts have nothing to do with each other.
- Non-medical in-home care and companion services
- Home health agencies with clinical staff
- Private-pay agencies and those billing programmes
- Registries placing caregivers with families directly
- Agencies growing past the headcount where new obligations arrive
Growth brings thresholds. Headcount can cross into applicable large employer territory quietly, particularly with part-time caregivers counted as they are, and the obligations that follow arrive whether or not anyone was watching for them.
This page is written for the agency owner. Clinical practices with their own premises sit closer to healthcare practices.
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Industry pages describe how our work applies to a sector. These are the services themselves.
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Learn moreFrequently asked questions
Can caregivers be paid as contractors?
Generally no, where the agency assigns them, sets the schedule and directs the work. That the work happens in a private home does not change the analysis, and this is a sector where classification is examined.
Do we pay for travel between clients?
Travel between clients during a shift is generally compensable working time. Agencies that pay only for hours in the home are usually wrong about this and accumulating a liability while they operate that way.
How do overnight and live-in shifts work for pay?
Sleep time, live-in arrangements and split shifts each have their own treatment, and the rules covering domestic and companionship work have changed in ways that caught agencies out. It is worth getting the pay policy reviewed rather than inherited.
We are profitable but short of cash. Why?
Because caregivers are paid weekly and the agency is paid on client terms or a reimbursement cycle. That gap is structural in this sector, and managing it needs current books rather than a year-end picture — see bookkeeping.
Not the question you had? The full tax FAQ covers more ground, and our client reviews say what the work is actually like.
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