Payroll for a Nanny: Household Payroll Basics

Nanny payroll is not just writing a check. If your nanny is your household employee, you may need to track wages, withhold or pay certain taxes, keep records, and issue year-end forms.

Best starting point: decide whether your nanny is a household employee, estimate the total cost, and choose whether you want software, a household payroll service, or professional tax help.

Nanny payroll setup

For household employers, the useful checklist is practical: worker status, tax setup, wage tracking, and year-end forms.

1Confirm worker status

A regular nanny is often treated differently from a casual babysitter or independent business.

2Track wages

Keep clear records of hours, pay dates, gross pay, and reimbursements.

3Handle taxes

Understand household employer tax responsibilities before the first tax deadline.

4Prepare year-end forms

Know whether W-2s and other filings are required for your household worker.

What nanny payroll usually costs

The real cost of hiring a nanny is higher than hourly pay alone. Household employers may need to account for employer taxes, possible state requirements, payroll service fees, and year-end forms.

Cost item	What it covers	Why it matters
Gross wages	Hourly or salary pay owed to the nanny	This is the base for payroll and tax calculations
Employer taxes	Household employment tax obligations where applicable	These can change the true cost of care
Payroll service	Software, filings, direct deposit, or year-end forms	Can reduce admin work and missed deadlines

Use the Nanny Tax Calculator to estimate your situation →

Do you need a nanny payroll service?

You may not need a full business payroll platform. Many household employers are better served by a household payroll service or tax professional that understands nanny payroll, W-2s, and household employer filings.

Simple wage trackingBest when you mainly need organization and year-end records.

Household payroll serviceBest when you want filings, reminders, and forms handled.

Tax professionalBest when your household tax situation is more complex.

Common nanny payroll mistakes

Calling a household employee a contractor. Worker classification is one of the first things to get right.
Only budgeting for hourly pay. Taxes, paid time off, overtime, and payroll service fees can change the total cost.
Waiting until tax season. It is easier to set up clean records from the beginning than reconstruct payments later.
Skipping written expectations. Pay schedule, hours, overtime, holidays, and reimbursements should be clear.

Household payroll guides

If you are paying help inside or around your home, start with the worker relationship before choosing a payroll service.

Household employeesMain hub for nanny, caregiver, housekeeper, and gardener payroll. Nanny payrollChildcare payroll, household taxes, and W-2 basics. Caregiver payrollIn-home care payroll, direct hires, and agency differences. Housekeeper payrollRecurring cleaning help and household employer questions. Gardener payrollProperty help, landscaping companies, and direct hires. Nanny tax calculatorEstimate household payroll cost before choosing a service.

More household payroll pages

Nanny payroll serviceWhen a household employer wants service help.Nanny tax guideTax basics for household employers.Payroll for babysittersWhen babysitting becomes household payroll.

When a payroll provider may help

This page is educational. Later, PayrollFor may add provider recommendations or referral links where they genuinely fit the employer situation.

Simple payroll software can make sense for small employers with straightforward payroll.
Household payroll services can help families manage nanny, caregiver, and household employee records.
Full-service providers may be worth comparing when payroll overlaps with HR, benefits, workers comp, or multi-state support.

No provider is right for every employer. The fit depends on employee count, worker type, filings, support needs, and total cost.