Knowledge Center

Topic

• Do au pairs have to pay nanny taxes?

  Do au pairs have to pay nanny tax? The short answer is while Federal and state payroll taxes – Social Security, Medicare, and Unemployment Tax – do not apply to au pairs, state and federal employment laws DO. This means that au pair compensation needs to adhere to the greater of the Federal, state or […]

• Is a nanny bonus reported as wages?

  I gave our nanny a $2000 holiday bonus. Do I have to report the nanny bonus as wages, and will there be a tax on bonus payments? A nanny bonus payment IS considered taxable wages. “Wages” are defined by the IRS as all remuneration paid, including the cash value of all remuneration paid in any […]

• What about tracking the nanny’s hours? What is required?

  Fair Labor Standards Act (FLSA) states that due to the nature of their work and duties, nannies and other household workers are employees, are hourly workers,  and are covered by minimum wage and overtime laws. The FLSA requires employers to maintain accurate and complete contemporaneous time records for tracking hours worked by an employee. When […]

• How can I help my nanny build a retirement savings account?

  For 2026 the limits will be as follows.  SIMPLE IRA plans: Up to $17,000 (or $18,100 for small employers) Defined Contribution plans (like SEP IRAs): The lesser of 25% of compensation or $72,000 401(k), 403(b), and 457 plans: Up to $24,500 Catch-up contributions (age50+): Up to $8,000   There are some practical ways an employer […]

• How to Write a Nanny Letter of Recommendation

  Our wonderful nanny will be leaving in September when our son begins full time school. How do we help her with a letter of recommendation? The nanny’s letter of recommendation from her former employer is an important part of her “Nanny Portfolio,” a collection of materials including her resume, work history, educational certifications, and examples […]

• I Want to Apply for Unemployment Benefits. Will I Get Them?

  Your nanny family let you go. You think to yourself: how do I get unemployment benefits? The working arrangement between you and the family is considered employment at-will under U.S. common law unless the written work agreement specifies a term of contract (which is a horrible idea). In broad terms, at-will employment means that employment is […]

• Are there any household employer tax breaks an employer can take advantage of?

  What Household Employer Tax Breaks Can Families Leverage? There are two popular household employer tax breaks for families to make care more affordable.  A family may only use up to $6,000 paid to a nanny or senior caregiver (qualified expenses) in any particular year. These tax breaks are not income-restricted. They do require, however, that […]

• How do I calculate overtime for my salaried nanny? What about compensation for occasional overnights?

  Most regular nannies are paid on a guaranteed pay basis. What this typically means is that the family agreed to pay the nanny a pre-determined salary for a given number of hours in a pay period. The full time nanny work schedule is often more than 40 hours per week. It is important to remember, […]

• What could happen if I don’t pay the nanny taxes? Are there any good reasons to pay?

  Why Should I Pay Nanny Taxes In-home care is expensive. After the family’s mortgage payment, the nanny or home health aide salary is often the biggest expense in the household. Add the cost of taxes on top of this and many families wonder “Why?” If I don’t pay the taxes the nanny keeps more money, […]

• My nanny wants net take home pay of $600 a week. What does that mean?

  Many household employees, including nannies, expect to negotiate a “net wage” or “net take home pay” agreement with their employer. The net take home pay agreement is a foreign concept for many nanny employers, and often the new employer does not fully understand the financial implications of a net pay agreement with the nanny or […]

• How frequently do I need to pay my household worker? My nanny wants to be paid weekly. Do I need to do that?

  The pay frequency of a nanny or senior caregiver (and all hourly, non-exempt employees) – the maximum interval between wage payments to the worker – is governed by state law. Nanny pay frequency regulations are summarized below. Payroll calculations for your household employee (nanny, housekeeper, maid, senior caregiver, etc.) are governed by the Fair Labor Standards Act. […]

• Are there tax breaks for dependent care? Does this apply when I hire an in-home caregiver?

  There are two popular strategies that families employing nannies or senior caregivers use to minimize their personal income taxes. Many families can utilize a flexible spending plan (cafeteria plan) offered by their employer for child and dependent care expenses. Your employer’s human resources department can provide you with plan details. Another strategy is the Child […]