Have a Nanny or Other Household Employee? Here’s What You Can Do Next.
Last week we covered how hiring a household worker can turn you into an employer. So what do you do next if you realize this is you? Don’t worry—it’s manageable, especially with the right tools and support.
Step 1: Confirm Whether You Have a Domestic Employee
Ask yourself:
Do I set the hours and job responsibilities for this person?
Do they work primarily in my home?
Am I paying them more than $2,700/year (or about $225/week)?
If yes, you likely need to comply with nanny tax rules. Don’t forget - this applies even if the worker is a family member, works part-time, or only helps out seasonally.
Step 2: Set Up Proper Payroll
Trying to run payroll manually for a domestic employee can get complex quickly. That's why we recommend working with a specialist in household employment compliance.
We Recommend Poppins Payroll.
Poppins Payroll is our recommended payroll partner for clients with nannies and other household staff. They handle:
Setting up your federal and state tax accounts
All tax filings and payments
Issuing pay stubs and W-2s
State and federal compliance
Easy onboarding for you and your employee
They make the process painless and ensure you're fully compliant. No stressing about misclassified workers or missed tax payments.
Step 3: Keep Good Records and Plan for Taxes
Work with your CPA (that’s us!) to:
Report wages on Schedule H of your tax return
Budget for employer taxes (~10–12% of wages paid)
Take advantage of available tax credits, like the Child and Dependent Care Credit or using Dependent Care FSAs
Next Steps
If you missed last week's introduction to the "Nanny Tax" read more here. If you have any questions, please feel free to reach out to TrueBlaze Advisors.