02/07/2026
Putting your child on payroll isn’t just a “cute” business move — it’s one of the smartest, most strategic decisions a small business owner can make.
When done correctly and legally, it opens the door to benefits that support your business and set your child up for long-term success.
A few reasons to consider it:
• Major tax advantages
When your child performs legitimate work for your business, their wages become a deductible business expense. Depending on your business structure and their age, you may also avoid certain payroll taxes. It’s a clean, compliant way to reduce taxable income while keeping money in the family.
• Early retirement savings (yes, really)
Once your child has earned income, they’re eligible to contribute to an IRA. Starting an IRA at 10, 12, or 15 years old gives them decades of compound growth. You’re not just paying them — you’re giving them a financial head start most adults wish they had.
• Real-world skill building
Kids can learn age‑appropriate tasks like filing, organizing inventory, cleaning, social media assistance, basic admin work, or helping with events. They gain:
• Work ethic
• Responsibility
• Money management
• Confidence
• An understanding of how a business actually runs
These are skills that shape them for life.
• A family legacy of entrepreneurship
They get to see firsthand what it means to build something from the ground up — the discipline, the creativity, the service, the heart. That exposure alone is priceless.
If you’re a small business owner, this is your reminder that you have opportunities most people don’t. Use them. Build generational knowledge, generational confidence, and generational wealth — all at the same time.
DISCLAIMER: I am not a financial or tax professional. I am a small business owner sharing what I’ve learned through the process. Consult your bookkeeper or CPA for more information.
