This article is educational, not tax advice. Many household employers treat nannies as W-2 employees—misclassification creates risk for everyone. A qualified household payroll provider can withhold correctly, issue forms on time, and answer state-specific questions.
Why informal pay creates friction
Without documented payroll, benefits like unemployment, Social Security credits, and mortgage-ready income verification become harder for caregivers—and liabilities can surface for families.
What to put in place early
Written offer, work agreement, pay frequency, and clear PTO rules. Loop in your CPA or a household payroll firm at offer stage, not at year-end.
Talk to a specialist
Rules vary by location. Choose a service that focuses on domestic employment so small details (live-in, travel days, bonuses) are handled consistently.