The Payroll Blog

News, tips, and advice for small business owners

How to Handle a Household Employee Transition

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Chris Bibey

There may come a time when you need to terminate a household employee.

A group of nannies sitting in a circle learning how to take care of children.

Whether it’s your decision, your employee’s, or just a matter of a contract expiring, navigating this transition can be challenging. As a household employer, there are some tasks that you’ll need to have wrapped up before your nanny leaves.

1. Review Your Contract and Employee Handbook

As a household employer, having guidelines in place when your nanny begins, such as a contract or an employee handbook, can come in handy multiple times during your nanny’s employment. These items also prove useful in the event you have to terminate your employee. You protect yourself as an employer by outlining what was expected to happen in this working relationship, and will have made that clear to your employee should you be terminating based on work performance.

Alternatively, if a nanny is leaving on their own but had concerns about how you held up your end of the bargain, they can share this with you, and you can use their feedback moving forward.

A contract or handbook is also helpful for having a conversation about leaving, no matter who is delivering the news. For example, the contract may state that your employee is required to provide two weeks notice before moving on. The same may hold for you if you’re the one deciding to terminate.

Sticking to the original terms and conditions of your agreement is important as this allows both parties to move on without any hard feelings.

2. Create a Checklist for You and Your Nanny

A checklist is going to be a useful tool to ensure a smooth transition. Some of the tasks you can expect to include on your list are:

  • Taking any necessary security measures, such as changing garage door or front door codes
  • Providing a reference letter for your nanny if you were satisfied with their work
  • Staying on top of any final payroll taxes to pay
  • Storing payroll records in a safe place, so you’re ready for tax season

For your nanny, you could ask for them to create a list of the activities they did with your children and provide feedback on how everything worked out. This would also be a great time for them to provide any feedback on how you managed everything as a household employer (granted things are ending positively). Your nanny may also have tasks they are responsible for, including providing you with updated contact information in case you need that for taxes.

3. Talk About Final Compensation

As a household employer, you are required to deliver a final paycheck to your nanny. However, some states have certain rules that you need to follow to distribute this paycheck accurately. For example, some states may require that you deliver the paycheck on your nanny’s final day, or you may be able to wait until the next scheduled payday. 

Planning Tip: if you typically deliver paychecks in person and this won’t be possible, ask your employee where to mail it.

4. Working With Your Nanny Payroll Provider

If you’ve been handling your nanny payroll with the help of an online payroll service, you’ll want to be in touch and let them know about this new transition and provide updated information in case you already have a replacement. If you are going to have a lull between employees but still want help with year-end taxes and W-2’s, payroll companies can help with that as well.


Transitioning household employees is not a fun task, even if things are ending on good terms. Being an employer requires some extra steps, so having a plan in place and following these tips can help lessen the stress during this tricky time.

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This website contains articles posted for informational and educational value. SurePayroll is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, SurePayroll. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. If you require legal or accounting advice or need other professional assistance, you should always consult your licensed attorney, accountant or other tax professional to discuss your particular facts, circumstances and business needs.