New Household Employer? Here's Your Complete Checklist

TL;DR — Quick Answer

Hiring a nanny, housekeeper, or caregiver makes you a household employer with legal obligations. Follow these 5 steps to get compliant: get an EIN, collect employee forms (I-9, W-4), register with your state, set up payroll, and issue pay stubs. Most setup takes less than one day.

Apply for a free EIN at IRS.gov (instant approval)
Complete Form I-9 within 3 days of hire
Register for state unemployment + workers' comp insurance
File W-2 by January 31 and Schedule H by April 15

5 Steps

To Full Compliance

From EIN to first paycheck

3 Days

I-9 Deadline

To verify work eligibility

20 Days

New Hire Reporting

State registry deadline

Before the First Day

Before your new employee starts, there are several important decisions and tasks to complete. Getting these right upfront prevents compliance headaches and sets the tone for a professional working relationship.

Confirm employee classification

Household workers (nannies, housekeepers, caregivers, personal assistants) are almost always classified as W-2 employees, not independent contractors. If you control when, where, and how the work is done, the worker is your employee.

Run a background check (with permission)

Request written consent before conducting background checks. Many families screen for criminal history, driving records, and references — especially for childcare positions.

Agree on compensation and terms

Set the hourly rate or salary, work schedule, paid time off, holidays, and job duties in writing. A written work agreement protects both you and your employee.

Decide how you will handle payroll

Choose between managing payroll yourself with spreadsheets and IRS publications or using a payroll service that automates calculations, filings, and payments.

Draft a Written Work Agreement

Even though it is not legally required in most states, a written employment agreement covering pay rate, schedule, duties, and termination terms prevents misunderstandings. Include details about overtime, meals, holidays, and any benefits you plan to offer.

What Is a Household Employee?

Not sure if your worker qualifies? Learn the IRS classification rules

Step 1: Get Your Employer Identification Number (EIN)

An EIN is your tax ID as an employer. You need it to file employment taxes, report wages to the IRS, and issue W-2 forms. Applying is free and takes about 10 minutes online.

Go to IRS.gov/EIN

Visit the IRS EIN online application. The service is available Monday through Friday, 7 a.m. to 10 p.m. Eastern.

Select "Household Employer" as your entity type

Click "View Additional Types, Including Tax-Exempt and Governmental Organizations," then select "Household Employer."

Complete the application

Provide your name, SSN, and mailing address. The form takes about 10 minutes to finish.

Receive your EIN instantly

Your EIN is issued immediately after you complete the online application. Save and print the confirmation for your records.

Keep Your EIN Separate from Your SSN

Your EIN is different from your Social Security Number. Always use your EIN — never your SSN — for employment tax filings and forms. Store your EIN securely; you will use it for all employer tax documents.

Step 2: Collect Required Employee Forms

Have your employee complete these forms on or before their first day of work. Proper documentation is the foundation of compliant household employment.

Form I-9

Employment eligibility verification (3-day deadline)

Form W-4

Federal withholding certificate (before first pay)

State Tax Form

State withholding form (varies by state)

Work Agreement

Written terms, duties, and compensation

Form I-9: Employment Eligibility

The I-9 verifies your employee's identity and authorization to work in the United States. This is a federal requirement for every employee, including household workers.

I-9 Section	Who Completes It	Deadline
Section 1 (employee info)	Employee	On or before first day of work
Section 2 (document review)	Employer (you)	Within 3 business days of hire
Retention	Keep on file	3 years after hire or 1 year after termination

Form W-4: Federal Withholding

The W-4 determines how much federal income tax to withhold from paychecks. While federal income tax withholding is technically optional for household employers, having a W-4 on file is strongly recommended.

Federal Income Tax Withholding Is Optional

Unlike business employers, household employers are not required to withhold federal income tax. However, if your employee requests it on their W-4, you should withhold. This helps your employee avoid a large tax bill when they file their return.

State Tax Forms

Most states with income tax have their own withholding form similar to the W-4. Check your state's department of revenue or taxation for the specific form required. Keep all completed forms on file — you do not need to submit them to the IRS or state.

Step 3: Register with Your State

Beyond federal requirements, you need to register as a household employer with your state. Requirements vary by state, but there are common obligations most household employers share.

State Unemployment (SUI)

Income Tax Withholding

Workers' Comp Insurance

Required in most states

New Hire Reporting

Report within 20 days of hire

State Disability Insurance

CA, HI, NJ, NY, RI, PR

Paid Family Leave

CA, CT, MA, NJ, NY, OR, WA

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New hire reporting is required in all 50 states. Most states require you to report new employees within 20 days of their start date — some states set shorter deadlines.

Workers' Compensation Is Often Overlooked

Many new household employers skip workers' compensation insurance, but it is legally required in most states. If your employee is injured on the job without coverage, you could be personally liable for medical bills and lost wages. Contact a local insurance agent or your state's workers' comp board to get a policy.

Household Employee Taxes 2026

Full breakdown of FICA, FUTA, and state tax obligations with worked examples

Step 4: Set Up Your Payroll System

You need a reliable system to track hours, calculate pay, withhold taxes, and maintain records. Our small business payroll 101 guide covers the full process in depth, but here are the two main approaches.

Feature	DIY Payroll	Payroll Service
Tax calculations	Manual (IRS Pub 15)	Automatic
Tax deposits & filings	You handle deadlines	Done for you
W-2 preparation	You create and file	Generated and filed
State compliance	Research each requirement	Handled automatically
Direct deposit	Set up with your bank	Built-in
Cost	Free (your time)	$40-75/month typical
Risk of errors	Higher	Lower

Choose a Pay Schedule

Select how often you will pay your employee. Your state may have minimum pay frequency requirements, so check before deciding.

Weekly

52 pay periods per year

Bi-weekly

26 pay periods per year

Semi-monthly

24 pay periods (1st and 15th)

Weekly Pay Is Most Common for Household Employees

Most nannies and caregivers prefer weekly pay. It aligns with their work schedule and makes budgeting easier. Check your state's labor laws — some states require at least semi-monthly pay for domestic workers.

Step 5: Issue the First Paycheck

When payday arrives, follow these steps to calculate and deliver compensation correctly.

Calculate gross pay

Multiply hours worked by the hourly rate, or divide the annual salary by the number of pay periods. Include any overtime at 1.5x the regular rate for hours over 40 per week.

Calculate and withhold taxes

Deduct Social Security (6.2%) and Medicare (1.45%) from gross pay. Add federal income tax withholding if your employee requested it on their W-4. Apply state income tax if applicable.

Calculate net pay

Subtract all withholdings from gross pay. This is the amount your employee takes home.

Pay your employee

Issue payment by check, direct deposit, or cash with a signed receipt. Direct deposit is the most reliable and creates an automatic paper trail.

Provide a detailed pay stub

Every pay stub should show gross pay, each withholding amount, and net pay. Many states legally require you to provide an itemized pay stub.

Withholding Breakdown for Each Paycheck

Social Security: 6.2% of gross (employee share) + 6.2% employer share
Medicare: 1.45% of gross (employee share) + 1.45% employer share
Federal income tax: Per W-4 (optional for household employers)
State income tax: Per state form (if applicable)

Ongoing Employer Obligations

Once you are set up, household employment requires consistent attention to payroll, taxes, and record-keeping on three cycles.

Frequency	Tasks
Each pay period	Calculate and pay wages, withhold employee taxes, record hours, provide pay stub
Quarterly	File state unemployment reports, pay SUTA taxes, make estimated tax payments (if applicable)
Annually	Issue W-2 by Jan 31, file W-2/W-3 with SSA by Jan 31, file Schedule H by Apr 15, reconcile state filings

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Keep records of every paycheck, hours worked, and tax withholding for at least four years. The IRS can audit household employment taxes going back three years — six years if they suspect underreporting.

Estimated Tax Payments

Since household employment taxes are reported annually on Schedule H, the IRS expects you to account for them throughout the year. Either increase your W-4 withholding at your regular job or make quarterly estimated tax payments using Form 1040-ES. Failing to do so may result in an underpayment penalty.

Year-End Requirements

At the end of the year, household employers face several critical deadlines. Missing these can result in penalties and interest from both the IRS and your state.

Deadline	Action Required	Filed With
January 31	Provide W-2 to employee	Employee
January 31	File W-2 and W-3	Social Security Administration
April 15	File Schedule H with Form 1040	IRS
Varies by state	State year-end reconciliation	State tax/unemployment agency

Prepare and deliver the W-2

Calculate total wages, Social Security and Medicare withholdings, federal and state income tax withheld, and report them on Form W-2. Give a copy to your employee by January 31.

File W-2 and W-3 with the SSA

Submit Copy A of the W-2 along with transmittal Form W-3 to the Social Security Administration by January 31. E-filing through the SSA's Business Services Online portal is the fastest option.

Complete Schedule H

Report your total household employment taxes on Schedule H (Form 1040). This includes both employer and employee shares of FICA, plus FUTA.

File Schedule H with your tax return

Attach Schedule H to your personal income tax return (Form 1040) and file by April 15. The taxes calculated on Schedule H are added to your total tax liability.

Late W-2 Penalties Are Steep

The penalty for filing W-2s late ranges from $60 to $310 per form depending on how late you file, with higher penalties for intentional disregard. Set a calendar reminder for mid-January to prepare W-2s with time to spare before the January 31 deadline.

Household Employee Taxes 2026: Complete Guide

Detailed tax rates, thresholds, and a full worked example for a $40K nanny salary

Frequently Asked Questions

Yes. Every household employer needs an EIN to file employment taxes and issue W-2 forms, even if you only have one employee. Applying online at IRS.gov is free and takes about 10 minutes.

No. Federal income tax withholding is optional for household employers. However, if your employee requests it by filling out a W-4, you should withhold. Many employees prefer this to avoid a large tax bill at year end.

Section 1 of Form I-9 must be completed by the employee on or before their first day of work. You (the employer) must examine identity documents and complete Section 2 within 3 business days of the hire date.

In most states, yes. Workers' compensation requirements vary by state, but the majority require household employers to carry coverage. Check with your state's workers' compensation board for specific requirements.

Pay frequency depends on your state's labor laws. Most states require at least semi-monthly pay for household employees, though weekly and bi-weekly schedules are most common. Check your state's Department of Labor for specific minimum pay frequency requirements.