It's one of the most common questions parents search, and the answer surprises many families. In most cases, a nanny who works in your home is your household employee, not an independent contractor.
The IRS looks at who controls the work. If you decide the hours, the routines, where the care happens and how your children are cared for, the nanny is generally your employee, even if she works for other families too. That's why paying a nanny as a 1099 contractor is rarely correct.
Pay, tax and labor rules vary by state and city. This guide explains common practice; a household payroll provider, accountant or your state labor department can confirm what applies to you.
Tammy Gold, LCSW, spent years matching families with nannies before writing Secrets of the Nanny Whisperer (Penguin). Today she works beside families, and their agencies, as a neutral expert: defining the job, interviewing candidates, checking references and setting up the first 30 days.
How you pay matters less than whether you report the wages. A nanny can be paid by check, direct deposit or an app and still be on the books. Paying "under the table" carries real costs for both sides: your nanny loses Social Security credit, unemployment protection and proof of income for things like renting an apartment. You can face penalties and back taxes, and you may lose access to childcare tax benefits that require reporting your provider.
Have the conversation openly. Explain what reported wages give her: credit toward Social Security, eligibility for unemployment, and income she can show a landlord or lender. Some families discuss adjusting the gross rate so her take-home pay is reasonable. Either way, put the agreement in writing.
Rarely. A nanny who works in your home on your schedule and your terms is generally an employee. A tax professional can review an unusual arrangement.
Often, yes, when the wages are reported and you can provide your nanny's taxpayer information. Check your plan's rules.
No. She helps you set pay, terms and the work agreement, and points you to a payroll provider or accountant for the tax side.
Pay, hours and expectations set clearly, before your nanny starts.
$189
Screening call, reference questions, clinical interview, and trial-day checklist.
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Tammy is not a placement agency and has no affiliation with, or financial interest in, any agency, daycare or payroll service. She provides independent expert guidance; decisions remain your family’s. Legal, tax and licensing questions belong with the appropriate professional or state agency.