Paying a nanny makes you a household employer once wages pass the IRS thresholds. That means Social Security and Medicare, possibly federal and state unemployment tax, a Schedule H with your own tax return, a W-2 for your nanny, and in many states a pay statement every payday. Nanny payroll services exist to take some or all of that off your hands. This post compares the main options on facts you can check: what each one costs and who does the filing.
What a nanny payroll service actually does
The services in this post fall into two groups, and the difference matters more than the price.
- Full service: the company registers you with the federal and state tax agencies, calculates withholding, moves the money, files the quarterly state returns and produces your year-end forms. You approve payroll and keep the money in your account until it is due.
- Software: the tool calculates taxes, makes pay stubs and prepares the W-2 and Schedule H. You register with the agencies, pay the tax and file the returns yourself, usually with reminders from the tool.
A third route is doing it all yourself, with the IRS's Publication 926 open, a spreadsheet and a way to give your nanny a clear pay record. That is cheaper and entirely legal. It costs you time, and the risk of missing a state deadline is yours.
Nanny payroll services compared
| Poppins Payroll | HomePay Essentials | HomePay Plus | NannyKeeper Starter | |
|---|---|---|---|---|
| Published price | $49 a month | $59 a month | $75 a month | $8 a month or $100 a year |
| Employees included | 1 (then $10 a month each) | Not stated on pricing page | Not stated on pricing page | 1 (Plus plan: up to 5 for $15 a month) |
| Registers you with tax agencies | Yes (federal, state, local) | Yes (federal and state) | Yes (federal and state) | No (EIN help on the annual Plus plan) |
| Files quarterly returns for you | Yes | Yes | Yes | No (reminders) |
| W-2 and Schedule H | Included for active customers | End-of-year forms included | End-of-year forms included | Generated for you to file |
| Direct deposit | Yes, or pay by your own check | Yes | Yes | Not stated on pricing page |
| Free period | Rest of the first calendar month | Not stated | First month free | Free tier tracks payments only |
Checked October 4, 2026. Figures from each company's own pricing page (sources below). Poppins charges separately for state registrations and non-standard services; HomePay states it refunds its fees if you are unhappy within six months of activation. GTM Payroll Services also sells household payroll, but its pricing page did not load for us on the check date, so it is not in the table.
Over a year, the full-service options cost roughly $588 (Poppins, one employee), $708 (HomePay Essentials) or $900 (HomePay Plus) before any extra fees. NannyKeeper Starter costs $100 on an annual plan, but you file the returns and make the tax payments yourself.
Which option fits which family
| Your situation | Usually the better fit | Why |
|---|---|---|
| You have never been an employer and want no filing at all | Full service (Poppins, HomePay) | They register you, file every quarter and deal with agency letters |
| Your state has its own payroll programs (for example disability or paid family leave) | Full service | More state accounts and returns to keep track of |
| You are comfortable with tax forms and want the lowest cost | Software (NannyKeeper) or DIY | You save most of the fee and do the filing |
| You pay your nanny less than the IRS thresholds | DIY | Federal employment tax may not be due, though state rules and minimum wage still apply |
| You already use an accountant for your own return | Ask them first | Some accountants add Schedule H and state returns to work they already do |
The thresholds that decide whether you need any of this
For 2026, IRS Publication 926 says you withhold and pay Social Security and Medicare if you pay one household employee cash wages of $3,000 or more in the year. Federal unemployment tax applies if you pay total cash wages of $1,000 or more to household employees in any calendar quarter. Social Security is 6.2% and Medicare 1.45% for each of you, employer and employee.
Wages paid to an employee who is under 18 at any time in the year don't count for Social Security and Medicare, unless household work is their principal occupation. Federal income tax is withheld only if your nanny asks and you agree. The 2026 W-2 goes to the Social Security Administration by February 1, 2027, and it needs your employer identification number.
State rules sit on top. Every state runs its own unemployment insurance, some have disability or family leave programs, and many require a written pay statement each payday. The federal Fair Labor Standards Act covers nannies for minimum wage, and for overtime unless they live in your home.
Doing nanny payroll yourself
The do-it-yourself route is a short list, and most of the work falls on a few dates in the year.
- Get an employer identification number from the IRS and register with your state for unemployment insurance.
- Have your nanny complete Form I-9, and Form W-4 if you agree to withhold income tax.
- Each payday, work out gross pay, Social Security, Medicare and any withholding, pay the net amount and give a pay stub.
- Keep the records the Department of Labor lists: name, address, hours each day and week, and wages paid.
- File state unemployment returns on the state's schedule, usually quarterly.
- After the year ends, give your nanny a W-2, file it with the SSA, and add Schedule H to your Form 1040. Many families raise their own withholding or estimated payments during the year so Schedule H doesn't arrive as one large bill.
The pay stub is the step most families improvise. A spreadsheet works, but it needs the year-to-date totals carried forward correctly every week, and that is where errors creep in.
Where PayDocs fits, and where it doesn't
PayDocs is not a payroll service. It does not register you with any agency, move money, file returns or pay tax. It makes the documents: a pay stub for each payday from your figures, and Form W-2 employee copies (B, C and 2) at year end. Copy A, which goes to the Social Security Administration, is not produced, so you file that yourself.
That makes it a fit for the do-it-yourself route, or for families whose software doesn't make a pay stub they like. Creating and previewing a stub is free; the finished PDF is $4.99 once checkout opens, or less per document in packs of 4 or 12. The free US nanny tax calculator shows what a nanny's pay costs you, including your employer share, and the free paycheck calculator estimates the federal withholding, Social Security and Medicare lines if you want a check on your numbers.
A PayDocs pay stub records what you paid. It is not proof of income for anyone and is not checked by the IRS or any state.
Questions
How much does a nanny payroll service cost?
On the companies' own pricing pages on 4 October 2026: Poppins Payroll $49 a month for one employee, Care.com HomePay $59 (Essentials) or $75 (Plus) a month, and NannyKeeper from $8 a month or $100 a year, which prepares forms but does not file them for you.
Do I need a payroll service to pay a nanny legally?
No. A family can register, withhold, file and issue the W-2 itself. A service saves time and lowers the risk of a missed state deadline; it is not a legal requirement.
Does PayDocs file nanny taxes?
No. PayDocs makes pay stubs and W-2 employee copies from your figures. It does not file returns, pay tax or register you with any agency.
What is the 2026 nanny tax threshold?
IRS Publication 926 sets $3,000 in cash wages to one household employee in 2026 for Social Security and Medicare, and $1,000 in total cash wages in any calendar quarter for federal unemployment tax.
Sources
- IRS, Publication 926 (2026), Household Employer's Tax Guide
- U.S. Department of Labor, Fact Sheet #79C: Recordkeeping for household employers
- U.S. Department of Labor, Fact Sheet #79B: Live-in domestic service workers
- Poppins Payroll, pricing (checked 4 October 2026)
- Care.com HomePay, product and pricing (checked 4 October 2026)
- NannyKeeper, pricing (checked 4 October 2026)
Sources checked October 4, 2026. This article explains how pay documents work; it is not tax or legal advice.
