Host Family Guide

Au Pair Payroll and Taxes: What Host Families Need to Know

An au pair's weekly stipend is household wages — but the J-1 visa changes which taxes apply. Here's what you must pay, which taxes you owe (and don't), and when the rules change.

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✓ Updated August 2026 · Verified against IRS au pair guidance, 22 CFR § 62.31, and state agency rules

An Au Pair Is a Household Employee

An au pair is a young adult who lives with your family on a J-1 cultural exchange visa and helps care for your children. For payroll purposes, the IRS treats au pair work as household employment: the weekly stipend is wages, and the host family is the employer.

What makes au pairs different from a nanny is immigration status. Most au pairs are nonresident aliens for U.S. tax purposes during their first two calendar years, and that status switches off several taxes that normally apply to household wages.

One early check that matters: if your au pair was previously in the U.S. on an F, J, M, or Q visa — as a student, for example — those earlier years count against the clock, and they may already be a resident alien. The exemptions below depend entirely on nonresident status.

What You Must Pay

Two floors apply, and you must pay the higher one.

Federal stipend floor
$195.75/wk
State Department minimum, standard program
Your state or city minimum wage
Rate × hours
usually the higher — and controlling — number
Weekly hours cap
45 hours
no more than 10 hours per day
Education allowance
Up to $500
paid by the host family, per program rules

The federal stipend formula already credits room and board — that's why it looks low. Several states, California most prominently, take the position that state and local minimum wage applies to au pairs for every hour worked, and in a city with its own minimum wage ordinance, a 45-hour week at the city rate is the real floor.

Agency guidance often tracks only the federal stipend. If your agency quoted $195.75 per week and you live somewhere with a higher minimum wage, the higher rate generally controls — and back wages can be owed for the difference. Room, board, and the education allowance are program obligations provided in addition to the wage; they cannot be charged back against it.

Which Taxes Apply

While your au pair is a nonresident alien, the tax picture differs from a nanny's in two big ways — and matches it in two others.

Au pair taxes while the au pair is a nonresident alien
TaxApplies?Why
Social Security & Medicare (FICA) No J-1 nonimmigrant wages are excluded from FICA while the au pair is a nonresident alien.
Federal unemployment (FUTA) No The same nonresident-alien exclusion applies to FUTA — regardless of how much you pay.
Federal income tax Yes — au pair pays The stipend is taxable income, but household employers aren't required to withhold it. The au pair files Form 1040-NR by April 15 and pays the tax directly (nonresident aliens can't take the standard deduction).
State payroll taxes Often yes Many states don't mirror the federal exclusion — see below.

The Two-Year Clock

The FICA and FUTA exemptions last only as long as nonresident-alien status does. For a typical first-time J-1 au pair, that covers their first two calendar years in the U.S. Starting in the third calendar year, the au pair generally becomes a resident alien — from January 1 — and the exemptions end: FICA applies, and FUTA applies under the normal household-employer rules.

If your au pair extends, recheck at each January 1. An extension into a third calendar year is the most common way host families get caught out — the paychecks that were correct in year two are wrong in year three. Prior F, J, M, or Q visa years shorten the clock further.

State Payroll Taxes Usually Still Apply

The nonresident-alien exclusion is federal law. Most state payroll tax systems have no equivalent, so state unemployment insurance and related programs typically treat au pair wages like any other household wages once you cross the state's normal thresholds.

California is the clearest example: au pair wages are subject to UI, ETT, and SDI under the standard household thresholds — $750 in a quarter for SDI, $1,000 for UI and ETT. A host family paying a lawful California wage crosses both in the first weeks of a quarter. State income tax withholding, like federal, is voluntary for household employment in most states.

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Paperwork and Filing

  • You: pay at least the controlling minimum wage weekly, keep records of hours and pay, register as a household employer where your state requires it, and file the state returns that apply. With no FICA or FUTA due, there is typically no Schedule H liability while the au pair is a nonresident alien — state filings are usually the whole job.
  • Your au pair: gets a Social Security number (J-1 visitors are eligible), files Form 1040-NR by April 15 for the prior year's stipend, and pays any federal and state income tax due. Au pairs aren't eligible for the Earned Income Tax Credit or education credits, and can't use tax-treaty student articles.
With Nest Payroll: when you give an employee the Au Pair title, the app opens the withholding options, points you to the J-1 FICA and FUTA exemptions, and warns you before you finish if they're still off. The election is yours to make — Nest never sets it for you, because only you know your au pair's visa status, and "au pair" is often used loosely for caregivers these exemptions don't apply to. Once you've elected, every paycheck, state filing, and year-end form follows your setting — including catch-up payroll if earlier quarters need correcting. Message us in the app before you run your first au pair payroll (or a catch-up) and we'll confirm the exemption settings and your state's requirements with you.

The Good News: Au Pair Costs Are Child Care

The stipend, the agency program fee, and the education allowance can all count toward a Dependent Care FSA and the Child and Dependent Care Credit — the same tax breaks available with a nanny. For the full walkthrough, see our complete guide to household employer tax breaks.

Quick Reference

Au pair essentials

  • Status: household employee on a J-1 visa; nonresident alien for roughly the first two calendar years
  • Wage floor: the higher of $195.75/week (federal stipend) or your state/city minimum wage × hours, up to 45 hours/week
  • FICA & FUTA: not owed while nonresident alien; both apply once resident
  • Federal income tax: owed by the au pair via Form 1040-NR; no withholding required of you
  • State payroll taxes: usually owed under normal household thresholds (CA: UI, ETT, SDI)
  • Room & board: provided by the host family — never charged against wages
  • Tax breaks: stipend, agency fee, and education allowance qualify for DCFSA and the Care Credit

Related

→ Catch-up guide for households who paid incorrectly or under the table → Nanny tax breaks: DCFSA, Care Credit, EAP, and ICHRA → State-by-state household employer guides
Disclaimer: This article is for informational purposes only and should not be considered tax or legal advice. Residency status determines an au pair's tax treatment, and a prior U.S. stay on a student visa can change everything — for a specific situation, consult a tax professional familiar with nonresident filings.

Sources:
  • IRS: Au Pairs (International Taxpayers)
  • IRS: Aliens Employed in the U.S. — FUTA
  • 22 CFR § 62.31, Exchange Visitor Program — Au Pairs
  • California EDD: Information Sheet DE 231EE, Exempt Employment
  • IRS Publication 926, Household Employer's Tax Guide