Hiring a nanny for your home usually makes your family a household employer. That means the nanny is generally an employee—not an independent contractor—and the family may have federal and North Carolina payroll responsibilities.
For 2026, if you pay one household employee $3,000 or more in cash wages during the year, Social Security and Medicare tax rules generally apply. This threshold changes periodically, so confirm the current amount each year.
What household employers generally need to do
- Confirm that the worker is properly classified as a household employee.
- Complete federal and state registrations that apply to the household.
- Track gross wages, withholding, paid time off, overtime, and reimbursements.
- Withhold and pay the employee and employer portions of Social Security and Medicare taxes when required.
- Determine whether federal and state unemployment taxes apply.
- Provide Form W-2 by the required deadline and file Schedule H with the family’s federal income-tax return when applicable.
Federal income-tax withholding is generally optional for a household employee unless the employee asks for it and the employer agrees. North Carolina rules and reporting obligations may differ.
Understand unemployment-tax thresholds
Federal unemployment tax may apply if total household-employee cash wages reach $1,000 in any calendar quarter in 2025 or 2026. North Carolina’s Division of Employment Security states that domestic-service employers may be liable for state unemployment tax when they pay $1,000 or more in quarterly wages for services in a private home.
Review the current North Carolina DES employer-tax guidance and register through the state system if required.
Start payroll correctly
Families should discuss gross pay—not take-home pay—and put compensation, overtime, benefits, paid leave, reimbursements, and the work schedule in a written employment agreement. A nanny is still usually a household employee when the family controls the work setting, schedule, and core duties.
Household employers should verify work authorization, collect the appropriate tax forms, keep payroll records, and follow wage-and-hour rules. Most household employees are entitled to overtime under federal law, although rules can vary for live-in employees and state or local law may be more protective.
Review North Carolina reporting
North Carolina requires certain wage statements to be reported even when state income tax was not withheld. NCDOR’s eNC3 filing FAQ explains W-2 reporting for household employees, and its withholding-tax page provides current registration and filing information.
Use reliable, current federal guidance
Review IRS Publication 926, Household Employer’s Tax Guide and IRS Topic No. 756. The U.S. Department of Labor also provides domestic-worker wage-and-hour guidance.
Many families use a household-payroll provider or qualified tax professional for registration, pay stubs, quarterly payments, year-end forms, and state filings. Notable Nannies does not provide tax or legal advice, and this overview is not a substitute for advice based on your circumstances.
Planning a long-term nanny hire in the Triangle?
Learn about our placement process, read the family FAQ, or start a family application.
Last reviewed August 2026. Tax thresholds and filing rules change; confirm current federal and North Carolina guidance before acting.
