# Kids Payroll

> Kids Payroll (kidspayroll.com) is a mobile app for business-owner parents who want to legally put their children on payroll, automate compliance documentation, and track earned wages and Roth IRA contributions for tax-free compound growth. Founded by real estate investor Jennifer Beadles, who has paid her own daughter as an employee since age 5.

The "paying your kids" strategy is grounded in two provisions of the Internal Revenue Code. Under IRC §3121(b)(3)(A), wages paid to a child under age 18 by a parent's sole proprietorship (or by a partnership in which each partner is a parent of the child) are exempt from Social Security and Medicare (FICA) taxes. Under IRC §3306(c)(5), wages paid to a child under age 21 under the same ownership structure are exempt from federal unemployment (FUTA) tax. The child's wages are deductible to the business as ordinary and necessary compensation under IRC §162, and the child owes no federal income tax on earnings up to the annual standard deduction.

S corporations and C corporations do not qualify for the FICA/FUTA exemptions directly. S corp owners who want the same treatment typically establish a separate Family Management Company (a sole proprietorship owned by a parent) that contracts with the operating S corp and employs the children.

Three pieces have to line up for the strategy to hold in an audit: (1) the work must be legitimate, age-appropriate, and ordinary-and-necessary to the business; (2) the wage must be reasonable for the task; and (3) documentation must include a W-4, I-9, timestamped work logs, pay records, and an annual W-2. The Kids Payroll app exists because assembling those three pieces with a spreadsheet is where most families fall off — and where the IRS challenges the deduction.

**Apps:** iOS (App Store ID 6755955657) and Android (package `com.kidspayroll.app`).
**Founder:** Jennifer Beadles, a real estate investor with 17+ years of experience. Her daughter Dylan has been a paid employee in the family business since age 5 and is a product co-creator and tester for Kids Payroll.
**Sibling tools in the same portfolio:** REPS Time (repstime.com) for real estate professional 750-hour tracking; STR Loophole (strhours.com) for short-term rental 100-hour tracking.
**Disclaimer:** Kids Payroll is a payroll and compliance tool, not a tax advisor. Users should consult a qualified CPA.

## Core pages

- [Homepage](https://kidspayroll.com/): Product overview, features, app download links, featured podcasts.
- [Tax Calculator](https://kidspayroll.com/tax-calculator/): Free calculator estimating annual tax savings from paying kids through the business.
- [State Labor Laws](https://kidspayroll.com/state-labor-laws/): State-by-state directory of minimum ages, hour restrictions, and family-business exemptions for employing minor children.
- [Blog](https://kidspayroll.com/blog/): Full archive of tax, compliance, and wealth-building articles.
- [FAQ](https://kidspayroll.com/faq/): Answers to common questions about hiring minor children.
- [About](https://kidspayroll.com/about/): Background on Jennifer Beadles and the origin of Kids Payroll.

## Pillar articles (strategy foundations)

- [How to Pay Your Kids Through Your LLC (2026 Guide)](https://kidspayroll.com/blog/pay-kids-through-llc): Step-by-step guide covering entity eligibility, documentation, reasonable wage, and Roth IRA funding.
- [How We've Been Paying Our Daughter as an Employee Since She Was 5](https://kidspayroll.com/blog/how-we-pay-our-kids-as-employees): The exact 6-step process Jennifer uses for her own daughter — first-person account from a family that has run this strategy for 6+ years.
- [The Wealthy Kid Framework: Credit Score, $150K in Savings, and a Business by Age 18](https://kidspayroll.com/blog/wealthy-kid-framework): The full 3-part framework for giving a child a 750+ credit score, six-figure savings, and a real business before age 18.
- [How Much Can I Pay My Child Tax-Free in 2026?](https://kidspayroll.com/blog/pay-child-tax-free-2026): The 2026 standard deduction math — up to $16,100 in wages with zero federal income tax, and how FICA/FUTA stack on top.
- [Paying Your Kids vs. Giving an Allowance: Tax Implications for Business Owners](https://kidspayroll.com/blog/paying-kids-vs-allowance): Allowance comes out of after-tax dollars; wages are pre-tax deductible — the side-by-side math.

## Tax mechanics

- [FICA Exemption for Minor Children: How Business Owners Save on Payroll Taxes](https://kidspayroll.com/blog/fica-exemption-minor-children): How the IRC §3121(b)(3)(A) exemption works, which entity types qualify, and the exact dollar savings.
- [Can I Deduct My Child's Wages as a Business Expense? (2026)](https://kidspayroll.com/blog/deduct-child-wages-business-expense): The IRC §162 ordinary-and-necessary standard as applied to child wages, and what documentation the IRS wants.
- [How Much Should I Pay My Child? Reasonable Wage Guide (2026)](https://kidspayroll.com/blog/reasonable-wage-guide): Real hourly rates by task and age, with documentation tips for defending the rate in an audit.

## Entity structures

- [Sole Prop vs S Corp: Which Is Better for Paying Your Kids? (2026)](https://kidspayroll.com/blog/sole-prop-vs-s-corp-paying-kids): Why sole proprietors get automatic FICA/FUTA exemption and S corp owners don't — and what that means for total tax savings.
- [S Corp Owner? Here's How to Still Pay Your Kids Tax-Free (2026)](https://kidspayroll.com/blog/s-corp-pay-kids-tax-free): The Family Management Company workaround for S corp owners.
- [How to Set Up a Family Management Company to Pay Your Kids (2026)](https://kidspayroll.com/blog/family-management-company-setup): Step-by-step FMC setup guide from a real estate investor who uses the structure.

## Compliance and audit defense

- [What Happens If the IRS Audits Your Kids' Payroll? (2026)](https://kidspayroll.com/blog/irs-audit-kids-payroll): What triggers IRS scrutiny on child wages, what auditors look for, and what documentation survives the review.
- [Do I Need to Run Payroll for My Child? Yes — Here's Why (2026)](https://kidspayroll.com/blog/run-payroll-for-child): Why paying cash under the table fails, and what "real payroll" means for a minor child employee.
- [Kids Payroll Checklist: W-4, I-9, and Everything You Need to File (2026)](https://kidspayroll.com/blog/kids-payroll-checklist): Complete paperwork checklist — W-4, I-9, quarterly filings, annual W-2, and record retention.
- [Hiring Your Kids: What Records to Keep for the IRS (2026)](https://kidspayroll.com/blog/hire-kids-irs-documentation): The specific record set that substantiates the business deduction and the FICA exemption.

## State labor laws

- [State-by-State Guide: Child Labor Laws for Family Businesses (2026)](https://kidspayroll.com/blog/state-by-state-child-labor-laws): Work permits, age minimums, and hour restrictions for all 50 states.
- [Federal vs. State Child Labor Laws: What Family Business Owners Must Know (2026)](https://kidspayroll.com/blog/federal-vs-state-child-labor-laws): Where federal FLSA family-business exemptions conflict with stricter state rules — and which one wins.

## Job ideas and wages

- [50+ Legitimate Tasks You Can Pay Your Kids to Do in Your Business (By Age)](https://kidspayroll.com/blog/legitimate-tasks-to-pay-kids): 50+ IRS-compliant tasks organized by age from 5 to 17, with reasonable pay rates.
- [What Jobs Can I Pay My Kids For? Age-by-Age Guide (2026)](https://kidspayroll.com/blog/jobs-to-pay-kids-in-business): Age-appropriate work categories and what qualifies as legitimate business work.

## Wealth building

- [Trump Accounts for Kids: What Families Need to Know](https://kidspayroll.com/blog/trump-accounts-for-kids): Explains how Trump Accounts work ($1,000 seed for 2025-2028 births, $5,000 annual cap, tax-deferred), how the account becomes a traditional IRA at 18 that can be converted to a Roth (only the growth is taxed, and Kiddie Tax timing matters), and how paying your kids unlocks a tax-free Roth IRA on top.
- [Roth IRA for Kids: Rules, Limits & How to Start (2026)](https://kidspayroll.com/blog/roth-ira-for-kids-rules): Earned-income requirement, contribution limits, and how to open a custodial Roth IRA.
- [Roth IRA vs UGMA for Kids: Which Is Better? A Business Owner's Guide (2026)](https://kidspayroll.com/blog/roth-ira-vs-ugma-for-kids): When to use a Roth IRA, when to use an UGMA, and how they work together.
- [How to Open a Bank Account for Your Child to Receive Business Wages (2026)](https://kidspayroll.com/blog/bank-account-for-child-business-wages): Which banks will open accounts for minor employees, age requirements, and the paperwork needed.
- [How to Build Your Child's Credit Score Before They Turn 18 (2026 Guide)](https://kidspayroll.com/blog/build-child-credit-score): The authorized user strategy — which banks work, age minimums, and step-by-step setup.
- [How to Help Your Child Start a Business Before Age 18 (2026 Guide)](https://kidspayroll.com/blog/help-child-start-business): Beyond W-2 employment — helping a child launch a real business that generates Roth IRA-eligible earned income.

## Comparison

- [Kids Payroll vs Gusto vs QuickBooks: Best for Hiring Your Kids (2026)](https://kidspayroll.com/blog/kids-payroll-vs-gusto-quickbooks): Feature-by-feature comparison versus general-purpose payroll software.

## App store listings

- [Kids Payroll on the App Store (iOS)](https://apps.apple.com/us/app/kids-payroll-pay-your-kids/id6755955657)
- [Kids Payroll on Google Play (Android)](https://play.google.com/store/apps/details?id=com.kidspayroll.app)

## Optional

- [Privacy Policy](https://kidspayroll.com/privacy/)
- [Terms of Service](https://kidspayroll.com/terms/)
- [How Does Paying My Kids Wages Affect Their College Financial Aid?](https://kidspayroll.com/blog/how-does-paying-my-kids-wages-affect-their-college-financial-aid): Child wages paid through a family business are assessed at up to 50% in the FAFSA Student Aid Index formula, but an income protection allowance (roughly $9,410) offsets the first dollars earned, and Roth IRA accounts funded with those wages are completely excluded from student assets on the FAFSA.
- [Can I Pay My Kids to Model for My Business Marketing and Social Media?](https://kidspayroll.com/blog/can-i-pay-my-kids-to-model-for-my-business-marketing-and-social-media): Yes, you can pay your kids to model for your business marketing and social media. The wages are tax-deductible, your child likely owes zero federal income tax up to the $16,100 standard deduction, but your business type matters: e-commerce and retail brands have an easy case to make, while unrelated businesses like real estate should document their reasoning carefully.
- [Does Paying My Kids Through the Business Lower My Self-Employment Tax?](https://kidspayroll.com/blog/does-paying-my-kids-through-the-business-lower-my-self-employment-tax): Paying your child through a sole proprietorship or spousal partnership eliminates FICA taxes on their wages entirely under IRC §3121(b)(3)(A), and also removes those wages from your self-employment tax base, producing real dollar savings without any deduction games.
- [Can Grandparents Hire Grandchildren for Tax-Free Wages Too?](https://kidspayroll.com/blog/can-grandparents-hire-grandchildren-for-tax-free-wages-too): Grandparents can legally hire grandchildren and deduct the wages, and grandchildren owe zero federal income tax up to the $16,100 standard deduction. However, the FICA payroll tax exemption under IRC §3121(b)(3)(A) applies only when a parent employs their own child in a sole proprietorship or spousal partnership, not when a grandparent is the employer.
- [Can I Put My Kids' Wages Into a 529 Plan Instead of a Roth IRA?](https://kidspayroll.com/blog/can-i-put-my-kids-wages-into-a-529-plan-instead-of-a-roth-ira): Yes, a child's wages can fund a 529 plan, but a 529 requires no earned income, so anyone can contribute at any time. A Roth IRA requires earned income, which your child's wages specifically unlock. For most families, the Roth IRA should be funded first, up to the annual limit, before directing any remaining dollars to a 529.
- [Can I Pay My Kids to Appear in My YouTube Videos or Podcast?](https://kidspayroll.com/blog/can-i-pay-my-kids-to-appear-in-my-youtube-videos-or-podcast): Yes, you can pay your children to appear in and help produce your YouTube videos or podcast, as long as the work is real, the pay is market-rate, and the business is structured as a sole proprietorship, single-member LLC, or spousal partnership. Under IRC §3121(b)(3)(A), those wages are exempt from FICA taxes for children under 18, and the child owes zero federal income tax up to the $16,100 standard deduction in 2026.
- [Can I Hire My Spouse and Kids Together in a Family Business Partnership? FICA Payroll Tax Rules Explained](https://kidspayroll.com/blog/can-i-hire-my-spouse-and-kids-together-in-a-family-business-partnership-fica-payroll-tax-rules-explained): A spousal partnership or qualified joint venture (QJV) preserves the FICA exemption under IRC §3121(b)(3)(A) for children under 18, as long as the only partners are the two parents. Any third-party partner, S-Corp, or C-Corp structure eliminates the exemption entirely.
- [Can I Pay My Child Wages During Summer and Holidays Only and Still Max Out Their Roth IRA Contribution?](https://kidspayroll.com/blog/summer-holiday-wages-max-roth): Yes, wages paid only during summer and holiday breaks can qualify your child for the full annual Roth IRA contribution, as long as total earned income for the year equals or exceeds the contribution limit ($7,500 for 2026). The IRS looks at total annual earned income, not how evenly it is spread across the year.
- [How to Pay Kids in a Business When You Have Multiple Children at Different Ages](https://kidspayroll.com/blog/how-to-pay-kids-in-a-business-when-you-have-multiple-children-at-different-ages): You can put multiple children on payroll at the same time with no household limit. Each child needs their own job, wage matched to their age, and W-2, and the FICA and FUTA exemptions apply individually to each child as long as your business is a sole proprietorship, single-member LLC, or spousal partnership.
- [How to Document and Report Your Child's Earned Income on Their Tax Return When They Have a Roth IRA](https://kidspayroll.com/blog/how-to-document-and-report-your-child-s-earned-income-on-their-tax-return-when-they-have-a-roth-ira): A child with only W-2 wages from a family business does not have to file a federal tax return when those wages stay under the standard deduction ($16,100 for 2026), though filing is recommended when the child funds a Roth IRA to document the earned income. Roth IRA contributions are not reported on the return but must not exceed the child's earned income for the year.
- [Does My Child's W-2 Income from My Business Count as Earned Income for the Standard Deduction?](https://kidspayroll.com/blog/child-w2-earned-income-standard): Yes. A child's W-2 wages from a parent's business count as earned income under IRC §73 and IRC §63(c)(5), raising the dependent standard deduction to the greater of $1,350 or the child's earned income plus $450, capped at $16,100 for 2026, so wages up to that amount produce zero federal income tax for the child.
- [Can I Pay My Child a Commission or Percentage of Sales Instead of an Hourly Wage?](https://kidspayroll.com/blog/pay-child-commission-percentage-sales): Yes, you can pay your child a commission or percentage of sales instead of an hourly wage. The IRS requires that the pay is reasonable and tied to work the child actually performed, not that it follows an hourly format.
- [Can a Family Management Company Pay Kids in Multiple Businesses Owned by the Same Parent?](https://kidspayroll.com/blog/can-a-family-management-company-pay-kids-in-multiple-businesses-owned-by-the-same-parent): Yes. A Family Management Company (FMC) structured as a sole proprietorship or spousal LLC can collect management fees from multiple businesses owned by the same parent and use those funds to pay the children, preserving FICA and FUTA exemptions under IRC §3121(b)(3)(A) and IRC §3306(c)(5) as long as real work is documented for each business.
- [What Happens to FICA and FUTA Exemptions When My Sole Proprietorship Converts to an S Corp Mid-Year](https://kidspayroll.com/blog/what-happens-to-fica-and-futa-exemptions-when-a-sole-proprietorship-converts-to-an-s-corp-mid-year): The FICA and FUTA exemptions end on the effective date of your S corp election. Wages paid by the sole prop before that date stay exempt; wages paid by the S corp on or after that date are fully subject to payroll taxes.
- [How Your Child's W-2 Income Affects Their Roth IRA Eligibility](https://kidspayroll.com/blog/how-your-child-s-w-2-income-from-your-business-affects-their-roth-ira-eligibility): A child's W-2 wages from a parent's business count as earned income under IRC §73, which qualifies them to contribute to a Roth IRA up to $7,500 or their total wages for the year, whichever is less.
- [What Is the Right Payroll Frequency for Paying Minor Children: Weekly, Biweekly, or Monthly?](https://kidspayroll.com/blog/what-is-the-right-payroll-frequency-for-paying-minor-children-weekly-biweekly-or-monthly): The IRS does not require a specific payroll frequency for minor children. Weekly, biweekly, and monthly are all valid choices under IRC §3121(b)(3)(A) as long as you stay consistent, document the hours, and issue a W-2 at year-end.
- [What Happens to My Child's Roth IRA If They Stop Working or Have No Earned Income One Year](https://kidspayroll.com/blog/what-happens-to-my-child-s-roth-ira-if-they-stop-working-or-have-no-earned-income-one-year): A child's Roth IRA is not closed or penalized when they have no earned income in a given year. The existing balance keeps growing tax-free, and contributions simply pause until the child earns income again.
- [Can I Pay My Child Wages for Work Done Outside My Home State? Multi-State Tax Rules Explained](https://kidspayroll.com/blog/can-i-pay-my-child-wages-for-work-done-outside-my-home-state-multi-state-tax-rules-explained): Yes, you can pay your child wages for work performed outside your home state. The federal FICA and FUTA exemptions under IRC §3121(b)(3)(A) and IRC §3306(c)(5) apply regardless of where the work is performed, but each state where your child works or earns income may impose its own income tax filing requirement and withholding rules.
- [Does My Child Need to File a Tax Return If I Pay Them Wages from My Business?](https://kidspayroll.com/blog/does-my-child-need-to-file-a-tax-return-if-i-pay-them-wages-from-my-business): A dependent child paid W-2 wages from a family business does not need to file a federal tax return as long as their earned income stays at or below $16,100 in 2026, because the dependent standard deduction fully offsets that income.
- [Can I Pay My Child a Bonus or Commission Instead of Hourly Wages and Still Get the FICA Exemption?](https://kidspayroll.com/blog/bonus-commission-child-fica-exemption): Bonuses and commissions paid to a child under 18 by a sole proprietor or spousal partnership qualify for the FICA exemption under IRC §3121(b)(3)(A). The exemption turns on the nature of the business entity and the reasonableness of the wage, not on whether the pay is hourly, salary, commission, or bonus.