Household Employer Checklist: Nanny and Caregiver Payroll, Done Right

If you're hiring a nanny, caregiver, or other household employee (such as a housekeeper, yard worker, or driver) for the first time, you're taking on real payroll and tax obligations, not just a personal arrangement. This checklist walks through what to set up before you run your first payroll and what to keep up with after, so you can pay your household employee correctly and maintain compliance from the start.

Household employer startup checklist

Complete these steps before you pay your first wages.

1. Confirm your worker's classification

Determine whether your nanny, caregiver, or other worker is a household employee or an independent contractor.  

2. Set up employer accounts and insurance

Get an Employer Identification Number (EIN) from the IRS. You'll need this to onboard your employee and file taxes.

Register the required state and local payroll accounts.  

• Depending on your state, this can include state unemployment insurance (SUI), state withholding, paid family leave, and local tax accounts.

• SurePayroll can provide assistance on state tax id registration  

Obtain workers' compensation or disability insurance if your state requires it for household employers, and  

• A note on state requirements: Household employer rules vary by state and locality. Confirm your state-specific registrations, insurance requirements, and filing deadlines before your first payroll run, and revisit them annually since requirements can change.  You may go to your state’s department of labor or department of revenue for resources.

3. Collect onboarding forms before you run your first payroll

Collect your employee's legal name, Social Security number, and address. SurePayroll can provide links to the federal W-4 and any required state withholding forms.

Complete Form I-9 with acceptable identity and work-authorization documents. This is handled by you, the employer.

Collect Form W-4 (federal) and any required state withholding form. This is handled by you, the employer.

Your state requires a report on new hires. SurePayroll will handle this filing automatically when the employee is marked as a new hire and is paid for the first time.  

4. Set up payroll

Decide the start date, pay type (hourly or salary), pay rate, and pay frequency (weekly, biweekly, semi-monthly, or monthly).

Choose a payment method: direct deposit or check.

Confirm the minimum wage and overtime rules that apply in your state and follow them for every pay period.

Ongoing household payroll maintenance

Once payroll is running, here's what stays on your plate every pay period and every year.

Run payroll and handle taxes each pay period

Track hours worked if your employee is paid hourly, review and approve each payroll run, and keep payroll records.

Plan for the taxes that typically apply: Social Security and Medicare (both your share and your employee's share), federal unemployment tax (FUTA), and state unemployment tax (SUI).  

State, local, and federal income tax withholding may also apply, depending on your employee's elections and where you live.

Handle year-end filings

Provide Form W-2 to your employee by January 31.

File Schedule H with your federal form 1040. SurePayroll will prepare Schedule H for you.  

Reconcile or claim any estimated tax payments (Form 1040-ES) submitted on your behalf, including any SurePayroll submitted for you, if applicable.

Managing payroll as a household employer

Household payroll is not business payroll, and it shouldn't be treated like an afterthought. SurePayroll^® By Paychex offers a household plan built specifically for families employing a nanny or caregiver, with support for the setup, filing, and year-end forms.  

See plans & pricing to find the right fit for your household.

This is legal information, not legal advice. For questions about your specific situation, consult an attorney or tax professional.

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