How to Set Up Payroll for a Nanny Share

A bird's eye view of a desk with a clipboard, calculator, and papers

In this article we'll review what you need to do to start paying your nanny for their work.

You’ve hired a nanny. Fantastic! Now comes the paperwork, which includes a nanny contract, and a nanny payroll. You are officially a household employer, which means you need to care for your nanny the same way your employer cares for you.

It can get complicated, but a nanny payroll service like Nanny Lane can make this very simple.

Why not just pay cash?

While paying with cash seems easier, and your nanny may request it at first, it’s important to pay your nanny legally and on the books. This not only protects you -- but it will cover your nanny with social security and unemployment insurance (if you had to lay her off).

Yes, it reduces their weekly take-home pay, but it can cover both of you in a crisis. Plus, legally documenting your nanny as your childcare plan gives you the childcare tax break you deserve.

What does a nanny payroll service do?

You know how when you work for a business, your paycheck just shows up? Well, the same thing will happen to your nanny. You will document their hours, and their paycheck just arrives and can be directly deposited.

You won’t have to write a personal check and account for all the taxes and withdraws, because the nanny payroll service does all that work for you.

Plus, a good nanny payroll service helps you file quarterly nanny taxes as well, which is something your accountant may not know a lot about.

What do I need to start my nanny on a payroll?

For you, the employer, you'll need:

  • Contact information
  • Social Security number
  • Federal and state tax information
  • Info on your nanny’s compensation
  • Bank account information
  • The personal information above of your spouse, if you file “married, filing jointly”

For your employee, you'll need:

  • Contact information
  • Social Security information
  • Bank account info where the direct deposit will go
  • State income tax withholding selections
  • Federal income tax withholding selections

How does a nanny payroll work with a nanny share?

The short answer is that you will all be filing separately, and she will be paid by your separate bank accounts. Nanny Lane has a payroll service that has been developed to specifically handle nanny share payroll logistics.

Learn more about our nanny payroll service

Visit our FAQ for more


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