Pay stubs for nannies and household employees

Are you a household employer?

The IRS’s Household Employer’s Tax Guide (Publication 926) lists babysitters, caretakers, cooks, drivers, health aides, housekeepers, nannies, private nurses and yard workers as examples of household workers. The key test it gives: the worker is your employee “if you can control not only what work is done, but how it is done.”

What you may need to withhold

Publication 926 says you must withhold and pay Social Security and Medicare taxes once the cash wages you pay one household employee in a year reach a threshold the IRS sets for that year. Federal income tax withholding is different: the IRS says you are not required to withhold it, and should only do so if the employee asks and you agree.

Thresholds change every year and some family members are exempt. Check the current Publication 926 before you work out any withholding.

Why give a pay stub

• Your employee can see exactly what was paid and what was withheld.
• You both have a record for each pay period and the year so far.
• It makes year-end paperwork easier, because the year-to-date totals are already there.

Questions