Nanny Payroll Service — Pay Your Household Employee Legally in Minutes
Set up in 5 minutes. We handle taxes, filings, and compliance — so you don't have to worry about doing anything wrong.
- We file and pay your taxes automatically
- Stay compliant in all 50 states
- Trusted by thousands of families
$42/month · Everything included · Cancel anytime
Pay Your Household Employee Legally in Minutes
$42/mo · All 50 states · Cancel anytime
Worried about compliance?
- Household payroll has strict IRS rules. We make sure everything is filed correctly — federal and state.
- Paid your nanny cash before? We fix back taxes and get you compliant quickly.
"Nest payroll team not only solved my retroactive tax situation, but also helped me navigate through the set up of local state tax."
— 5 Star App Store Review"Nest does all the compliance work including tax filings and tax payments in a fraction of the time — with no mistakes."
— 5 Star App Store ReviewWhat people are saying
Using for more than 2 years
“Great app and support staff. They make managing and paying employees very simple. They provide excellent documentation and support to help you make tax payments throughout the year and it’s so easy to file your tax return. Very responsive when asked questions. Priced just right too."
— WASpsyched, 02/08/2024, Apple App Store
Really fast easy setup
“Originally to hire a nanny I was trying to use SurePayroll, but they required me to call their salesperson constantly to get setup, and the process was onerous involving contracts to sign, credit checks, and even needing a letter from my bank. I eventually gave up after months of this annoying process and tried Nest instead. To my amazement, I didn’t need to talk to anyone or even wait at all, and within literally 5 minutes was generating paystubs for my nanny!”
— Melzidek, 08/03/2024, Apple App Store
Relief for the Non-Accountant
"“It was so tempting for us to hire a nanny for cash just based on the fear of doing the payroll requirements but I’m so glad that reasonable temperaments prevailed and we instead went with Nest. It’s been so easy and we can rest assured that we are doing everything by the book.”
— MotherNen2016, 04/08/2024, Apple App Store
Save time, avoid headaches
Get going in five minutes
Sign up, add your employee, and create your first pay stub — in minutes, not hours.
Track PTO, sick days, and reimbursements for education or healthcare.
Set payroll reminders or automate recurring pay stubs.
We handle the tax work
We register your EIN and state accounts, handle all required quarterly and annual tax filings, and deliver your W-2s, W-3 and Schedule H by the end of January.
Everything is included
$42/month, everything included.* No setup fees. Year-end tax filings included with active subscriptions. Cancel anytime.
Payroll for every kind of household employee
Whether you employ a nanny, babysitter, au pair, or nanny share — or a senior caregiver, home health aide, house cleaner, personal assistant, dog walker, or any other household worker — Nest Payroll handles the taxes, filings, and compliance the same way: automatically, in all 50 states, for $42/month.
Frequently Asked Questions
Do I have to pay taxes if I hire a nanny?
Yes. If you pay a household employee $2,800 or more in 2025 ($3,000 in 2026), the IRS considers them a household employee and requires you to withhold and pay Social Security, Medicare (FICA), and federal/state unemployment taxes. This is commonly called the "nanny tax." Failing to pay can result in penalties, back taxes, and interest.
Is my nanny a W-2 or 1099 employee?
Nearly always a W-2 employee. Because you control when, where, and how your nanny works, the IRS classifies them as a household employee — not an independent contractor. Issuing a 1099 instead of a W-2 is a common mistake that can trigger IRS penalties for both you and your nanny.
What happens if I pay my nanny under the table?
You risk IRS penalties including back taxes, interest, and fines that can exceed the original amount owed. If your nanny files for unemployment or gets injured on the job, you could face additional legal and financial liability. The good news: you can get caught up and become compliant retroactively. Use our free catch-up calculator to see exactly what you'd owe.
What is Schedule H and do I need to file it?
Schedule H (Form 1040) is the IRS form used to report household employment taxes. You must file it with your personal tax return if you paid a household employee above the annual wage threshold. It covers Social Security, Medicare, and federal unemployment tax (FUTA) for your employee.
How much does a nanny payroll service cost?
Nanny payroll services typically range from $39 to $75+ per month. Nest Payroll is $42/month with everything included — payroll processing, tax withholding, quarterly filings, year-end W-2s, and Schedule H preparation. There are no setup fees, and you can try it free for 14 days.
How do I set up payroll for my nanny?
You'll need to apply for an employer identification number (EIN), register for state tax accounts, determine the correct withholdings, and set up a system for regular pay stubs and tax filings. With a payroll service like Nest Payroll, this entire process takes about 5 minutes — we handle the EIN, state registrations, and all filings for you.
Can I get in trouble for not filing nanny taxes in previous years?
Yes, the IRS can assess back taxes, penalties, and interest for unfiled nanny taxes. However, voluntarily getting compliant before the IRS contacts you typically results in far lower penalties than being caught in an audit. Nest Payroll offers a dedicated catch-up service — use our free catch-up calculator to estimate what you owe, and we'll handle the rest.
What tax forms do I need to give my nanny?
Household employers typically need to provide a W-2 to their nanny at the end of the year. The W-2 reports total wages and any taxes withheld, and must be delivered by January 31. You may also need to provide regular pay stubs each pay period. Most states — including California and New York — require detailed wage statements, while a few states do not. With a payroll service like Nest Payroll, we automatically generate W-2s and compliant pay stubs, so you don't have to worry about meeting these requirements.
Disclaimers:
*The $42/month Essentials subscription includes household payroll services for one employee, including payroll processing, tax payments, quarterly/annual filings, and year-end tax documents (W-2, W-3, and Schedule H) for active, ongoing accounts with no gaps in subscription payments.
Nest Payroll handles required federal and state tax account registrations based on applicable employment laws and wage thresholds. Please note that some states require the employer to complete or authorize registration before Nest Payroll can complete the required tax work.
If you cancel before the end of a quarter or calendar year, any remaining/future required filings or year-end tax work is billed separately. Additional fees may also apply for services such as amended filings, adjustments for prior-period wages or catch-up services.
Pricing and applicable fees may change over time. Please refer to our Pricing page and Terms of Service for full details for the most up-to-date information.