North Dakota Employer Guide

North Dakota Household Employer Guide 2026

Your household employee — a nanny, caregiver, housekeeper, or anyone who works in your North Dakota home — is a W-2 employee. North Dakota is a simpler household-payroll state overall: low state income tax, no state paid leave, Job Service ND unemployment filings, and workers' comp through the state-run WSI system.

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✓ Updated May 2026 · Verified against North Dakota Office of State Tax Commissioner, ND Job Service, Workforce Safety & Insurance, and IRS
State Income Tax0%–2.5%
Minimum Wage$7.25/hr
UI Rate1.13%
Workers' CompWSI
Paid LeaveNot required
North Dakota is one of the simpler household-payroll states. The main ND-specific items are employer-paid unemployment insurance through Job Service ND, low state income-tax withholding if elected, and workers' compensation through Workforce Safety & Insurance. There is no state paid sick leave, no paid family leave, and no local income tax.
Your household worker is a W-2 employee. Whether they're a nanny, caregiver, housekeeper, gardener, or personal assistant — if you control when, where, and how the work is done, they are your employee under IRS rules. That means W-2 reporting, payroll tax compliance, and federal labor law obligations. Most household workers are employees under IRS rules, not contractors — issuing a 1099 in this situation can lead to back tax penalties, interest, and wage-law liability.

When the rules apply

North Dakota household employers mainly need to watch the federal payroll thresholds and the $1,000 quarterly North Dakota unemployment threshold:

2026 Thresholds
$3,000
Federal · 2026
Triggers Social Security and Medicare taxes (FICA) and W-2/W-3 reporting.
$1,000
Federal/quarter
Triggers federal unemployment tax (FUTA) and Job Service ND UI registration.
$1,000
State/quarter
Cash wages to all household employees combined in any calendar quarter. Triggers Job Service ND registration and employer-paid UI contributions.

How Nest Payroll handles this

Each pay period, you pay your employee the net amount directly — through Venmo, Cash App, Zelle, your banking app, or by check. Nest generates the pay stub, calculates payroll taxes, and registers you with Job Service ND once the $1,000 quarterly threshold applies.

Federal taxes — quarterly EFTPS payments

At the end of each federal quarter (March, May, August, December), Nest debits your bank account for the federal taxes owed — FUTA, employer + employee FICA, and any federal income tax withheld — and remits them to the IRS via EFTPS. You'll get a confirmation email a week beforehand. Your money stays in your account until taxes are actually due. We don't hold withholdings on your behalf. At year-end, Schedule H on your Form 1040 reconciles everything Nest already paid through the year; Nest produces a signature-ready version.

North Dakota state taxes — quarterly UI filings

Each quarter, Nest files the UI tax return with Job Service ND for state unemployment insurance — an employer-paid contribution, not withheld from your employee.

North Dakota UI tax: New household employers generally pay 1.13% on the first $45,100 of each employee's wages. This is employer-paid and not withheld from your employee. Nest calculates and remits this with quarterly Job Service ND filings. Source: Job Service North Dakota
North Dakota state income tax: ND has low progressive rates of 0%, 1.95%, and 2.50%. North Dakota uses the federal Form W-4 for state withholding calculations. State income-tax withholding is voluntary for household employers and requires agreement with your employee. Source: ND Office of State Tax Commissioner
End-of-year reconciliation: If you didn't cross the federal FICA threshold ($3,000/year per employee — most common when families start payroll late in the year or hire short-term help), we'll let you know exactly what was withheld but doesn't need to be remitted. You return those amounts to your employee, and we file accordingly.

Set up payroll in 5 minutes.

Nest handles ND UI registration, paystubs, quarterly Job Service ND filings, and year-end Schedule H — all for $42/mo.

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Setup checklist (before they start)

North Dakota Workers' Compensation Insurance — WSI state fund

North Dakota workers' compensation runs through Workforce Safety & Insurance (WSI), the state-run monopoly fund. Household employers should generally check with WSI before work begins because North Dakota does not use the private workers' comp market.

How to enroll: Apply through the WSI Employer Portal, or call WSI at 1-800-777-5033. WSI assigns the class code, premium rate, and billing schedule.

Form I-9 (Employment Eligibility)

Have your employee complete the Form I-9 at hire to verify they're authorized to work in the United States. You don't submit this anywhere — keep it filed in case of audit.

Federal W-4 (no separate ND state W-4)

The federal W-4 determines how much federal income tax to withhold from each paycheck. North Dakota uses the federal Form W-4 for state withholding calculations as well — there is no separate ND state withholding certificate.

(Form NDW-R is a different form — it's the reciprocity exemption certificate used only by Minnesota or Montana residents who work in North Dakota and want to be exempt from ND withholding because of those states' reciprocity agreements. Most household employees living in North Dakota will not need NDW-R.)

Federal and North Dakota income tax withholding are both voluntary for household employers and require mutual agreement between you and your employee.

North Dakota New Hire Reporting

Report new hires to the North Dakota New Hire Reporting Center within 20 days of the start date. You can file online at the link above, by mail, or by fax. Federal law requires this; ND penalty for failure is up to $20 per missed report.

Required Employment Posters

Even with a single household employee, ND requires the following workplace posters (or equivalent notification, since your home isn't a typical workplace):

  • Federal posters: FLSA, FMLA, EEO, USERRA, Polygraph Protection
  • ND Minimum Wage and Work Conditions Summary (ND Department of Labor)
  • WSI workplace poster (if covered)

For a household setting, a single binder kept in a common area satisfies the posting obligation in most cases.

Written Work Agreement

North Dakota does not require a written employment agreement, but it's strongly recommended. A clear written agreement reduces misunderstandings and protects both parties when situations come up that you didn't anticipate.

Use our free nanny contract template as a starting point — it covers compensation, hours, duties, vacation, sick time, confidentiality, and at-will employment language.

Pay & compensation

Minimum Wage — federal floor of $7.25/hr

North Dakota follows the federal minimum wage of $7.25/hr. There are no local city or county minimum wages anywhere in North Dakota. In practice, household-employer market rates are generally well above this; nanny pay in Fargo, Bismarck, and Grand Forks typically ranges from $15–$22/hr depending on experience and responsibilities.

Overtime — 1.5× regular pay over 40hr/week

Federal Fair Labor Standards Act (FLSA) overtime rules apply: live-out household employees get 1.5× their regular hourly rate for any hours over 40 in a workweek. Live-in household employees are exempt from federal OT (FLSA exemption for live-in domestic workers), but ND has no state OT requirement that overrides this.

North Dakota Overtime Rules
Worker typeOT triggerRate
Live-out (most nannies, housekeepers, caregivers)Over 40 hr/week1.5× regular
Live-inFLSA-exempt — no OT required1.0× regular

"No Tax on Overtime" Deduction (2025–2028)

The federal overtime deduction may let household employees deduct the premium portion of qualifying overtime pay on their personal tax return. This is a federal income-tax rule; it does not change how you calculate overtime, FICA, North Dakota withholding, or payroll records.

With Nest Payroll: Nest tracks qualified overtime reporting for W-2 purposes when required.

Pay Frequency

Household employees are usually treated as non-exempt hourly workers under FLSA rules — even when you've agreed to pay a "salary," federal FLSA treats it as a wage covering a fixed number of hours per week, with overtime owed on hours past 40.

Under N.D.C.C. § 34-14-02, employers must pay wages at least once a month. Most household payroll arrangements pay weekly or biweekly to keep cash flow predictable for both sides.

Mileage Reimbursement

North Dakota does not have a state-mandated mileage reimbursement rate for private employers. If your employee uses their own car for work-related driving (errands, school pickup, doctor's appointments for the children), reimburse at the federal IRS standard mileage rate — $0.70/mile for 2026. Reimbursements at or below the federal rate are not taxable wages.

Paystub Requirements

North Dakota does not have a specific statute requiring itemized paystubs, but you should provide them anyway for clear recordkeeping. Each paystub should show: gross wages, hours worked, deductions (federal income tax, FICA, ND PIT if withheld), net pay, and pay period dates.

With Nest Payroll: Nest generates a compliant earnings statement (pay stub) for every pay period — automatically. You can email each stub to your employee from the app, or download a PDF.

Time off & leave

Paid Sick Leave — none required statewide

North Dakota does not have a statewide paid sick leave law, and no city in ND has enacted a local paid sick leave ordinance. Sick time is offered at the employer's discretion.

If you choose to offer sick leave, common household-employer practice is 5–10 days/year, usable for the employee's own illness or to care for an immediate family member.

Vacation & PTO

North Dakota does not require paid vacation. If you offer it, document the policy in writing — under ND law, vacation pay is enforceable to the extent your written policy states it will be paid out at separation. A clear policy with a written cap (or "no payout at separation" provision) protects you.

Frontloading at the start of each year is the simplest approach. If you offer paid vacation, set the annual amount upfront and let your employee draw against it as time is used — no per-pay-period accrual tracking, no carryover headaches at year-end. See our frontload PTO & payout guide for the calculation method when payout does apply (earned-but-unused, pro-rated through the last day worked, at the final rate of pay).

Upon departure

When the working relationship ends — whether the employee resigns or you terminate — North Dakota's final pay rule (N.D.C.C. § 34-14-03) requires final wages to be paid by the next regular payday following separation.

At separation, give your employee a final paystub and a copy of any timekeeping records you've maintained. If you've offered vacation as part of your written policy, pay out the earned-but-unused portion (pro-rated through the last day worked, at the final rate of pay) per your policy.

Year-end forms

Your responsibilities

  • Hand the W-2 to your household employee by January 31 — Nest produces this; you deliver it
  • Attach Schedule H to your Form 1040 by April 15 — Nest produces a signature-ready version

What Nest handles for you

  • Quarterly federal tax payments to the IRS via EFTPS
  • W-3 + Copy A of W-2 filed with the Social Security Administration
  • Quarterly UI filings with Job Service ND once registration applies
  • Form 307 with the ND Office of State Tax Commissioner when ND withholding applies
With Nest Payroll: Your tax forms are generated automatically and appear in your Tax Summary by the end of January.
Bonuses and vacation payouts: Bonuses and vacation payouts are included on your employee's W-2 and taxed through regular payroll withholding calculations.

Tax breaks for household employers

Two federal tax breaks may help offset your nanny payroll costs:

1. Dependent Care FSA (DCFSA). Through your employer's benefits, you can set aside up to $7,500/year (2026 OBBBA increase from $5,000) in pre-tax dollars to pay for childcare for kids under 13. This typically saves 25–35% on the contributed amount, depending on your federal + state tax bracket.
2. Child & Dependent Care Tax Credit. On your federal Form 1040, claim 20–35% of qualifying childcare expenses (up to $3,000 for one child / $6,000 for two or more). The percentage scales based on your AGI.

For nannies caring for school-aged kids, families often use the DCFSA first (better tax savings for most), then claim the credit on any expenses above the FSA limit. Note: you cannot claim the same expenses under both — but you can split them.

Resources & free tools

🧮 Nanny Payroll Calculator ⏪ Catch-Up Calculator ↗ Gross-Up Calculator 📄 Free Contract Template 🏖️ Frontload PTO & Payout Guide 📚 Nanny Payroll 101

The information on this page is general in nature and not tax, legal, or financial advice. North Dakota rules change. Verify current rates and rules at ND Office of State Tax Commissioner and Job Service ND, or consult a tax advisor.