Hiring a Nanny
You just hired a nanny. Here's what comes next.
Welcoming someone into your home to care for your child is a big moment, and it also makes you a household employer. That comes with payroll and tax responsibilities that you may not have expected, but you’ve come to the right place. We’ve been helping families navigate exactly this for over 30 years.
This is one of the most important hires you'll ever make.
When you hire a nanny, you become a household employer, which means there are federal, state, and sometimes even local tax requirements that can begin with the very first paycheck.
The good news? You’re not expected to already know how all of this works. Most families don’t. That’s where we come in.
- Many families first learn about household payroll and tax obligations through their nanny, their agency, when a nanny requests a W-2, or a CPA asks questions at tax time.
- If that's what brought you here, you're already ahead of many families who discover it months or years later.
- We can help you from day one, or from wherever you're starting, even if you've already been paying for a while.
Not sure if this applies to you?
What nanny payroll actually involves.
Once you cross the IRS threshold, the obligation applies retroactively to the first dollar paid. Here’s what that means in plain terms.
This is not optional. If you pay a household employee more than the IRS FICA threshold, or cross the FUTA or SUTA thresholds, in a calendar year, the law requires you to comply. The IRS estimates it takes about 62 hours per year to manage this correctly on your own. We handle it entirely.
What HomeWork Solutions does for nanny families.
We take the entire payroll and compliance picture off your plate. Here’s what that looks like across our three service tiers.
Not sure which plan is right for your situation? A free 10-minute consultation will help you understand exactly what you need.
Are you hosting an au pair?
Au pair tax obligations differ from nanny obligations. Here’s what host families need to know.
Au pairs in the United States arrive on a J-1 cultural exchange visa. That visa status affects their tax classification in ways that differ significantly from a standard nanny arrangement.
Key differences for au pair host families:
- Au pairs on a J-1 visa are generally exempt from FICA taxes (Social Security and Medicare) during their exchange program period.
- However, their weekly stipend is still subject to federal income tax. Host families must withhold federal income tax unless the au pair qualifies for a tax treaty exemption.
- If an au pair becomes a resident alien during their stay, FICA obligations may apply. This changes annually and must be reviewed each calendar year.
- Host families are generally not required to pay FUTA for J-1 au pairs, but this can change based on residency status.
- Au pairs must receive a W-2 if any federal income tax has been withheld, or if wages exceed the filing threshold.
The compliance path for au pair host families is genuinely complex and frequently misunderstood. A conversation with our team will tell you your options.
Frequently Asked Questions
Can't I just handle this myself?
Some families do manage payroll on their own. But household employment comes with ongoing tax filings, payroll calculations, and year-end reporting requirements that can quickly become time-consuming and confusing.
Between federal and state obligations, changing tax rules, and filing deadlines, it is easy for small mistakes to turn into larger issues later on.
Our role is to make the process simple, accurate, and stress-free, so you can spend less time worrying about payroll and more time with your family.
Is this really required by law?
Yes. Once a household employee is paid over certain federal or state wage thresholds, household employers may be required to withhold and report payroll taxes, pay unemployment taxes, and comply with state and local employment requirements.
Importantly, once those thresholds are crossed, the requirements generally apply retroactively to wages paid from the first dollar earned, not just the amount over the threshold.
These rules can apply whether your nanny works full time or part time, and whether they are paid by check, direct deposit, or cash. Depending on where you live, requirements may include federal taxes, state unemployment insurance, paid leave programs, or local payroll taxes.
Because the rules vary by jurisdiction and can change from year to year, many families are not sure what applies to them, and that is completely normal. We help families understand their obligations, stay compliant, and avoid surprises down the road.
Does my nanny have to be on payroll, or can I pay her as a 1099?
Almost without exception, the answer is no. If you control the hours, the duties, and how the work is done, the IRS classifies your nanny as a household employee, not an independent contractor. Misclassification is one of the most common and costly mistakes household employers make. Our team can walk you through worker classification laws, and all of your employer obligations in about 10 minutes.
It seems expensive. Is it really worth it?
Consider the alternative. A single IRS notice, a missed state unemployment filing, or a wage dispute can cost thousands. Our service starts at $59 per month. That’s the cost of protecting yourself, treating your employee fairly, and never worrying about whether it was done right. Most families tell us it’s one of the easiest decisions they made. Also, it is the law.
What if I've already been paying my nanny for months without doing any of this?
You’re not alone, and you’re not out of options. A significant portion of our new clients come to us exactly in this situation, often after a CPA flags it at tax time or a nanny asks about her taxes. We can go backwards: reconstruct payroll records, file late returns, and bring you into full compliance from wherever you’re starting. No judgment.
Families across the country trust HomeWork Solutions.
“We were referred by our CPA and we couldn’t be happier with the service. The communication has been exceptional. They were professional, patient, and helpful during my many requests for guidance. Knowing that our caregivers will be paid on time and that the taxes and other paperwork are being processed correctly is such a relief.”
— KFR, Client since 2025
Ready to get this right from the start?
A free 10-minute call with a household employment specialist will tell you exactly what you need, what it costs, and how we handle it from here.
No phone trees. No menus. Just someone who knows nanny payroll and can answer your questions directly. Most families are surprised how little time it takes to get set up.