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 (2026) says you must withhold and pay Social Security and Medicare taxes if you pay cash wages of $3,000 or more in 2026 to any one household employee. Federal unemployment (FUTA) tax applies if you pay total cash wages of $1,000 or more to household employees in any calendar quarter of 2025 or 2026. Federal income tax withholding is different: you are not required to withhold it, and 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.
Schedule H and Form W-2 at year end
The IRS says you use Schedule H (Form 1040) if you paid cash wages to a household employee and the wages were subject to Social Security, Medicare or FUTA taxes, or if you withheld federal income tax. For 2026 the dates in Publication 926 are:
| What | Who gets it | By |
|---|---|---|
| Form W-2, Copies B, C and 2 | Your employee | February 1, 2027 |
| Form W-2 Copy A with Form W-3 | Social Security Administration | February 1, 2027 |
| Schedule H with your Form 1040 | IRS | April 15, 2027 |
You need an employer identification number (EIN) for these forms; your Social Security number can’t be used in its place. The IRS’s W-2 instructions add that even an employer with only one household employee files Form W-3, with the household employee box checked. Each pay stub’s year-to-date totals give you the figures for the W-2.
Who this covers
The same pay stub works for every kind of household employee you pay directly:
- Nannies and babysitters.
- Caregivers, home health aides and private nurses.
- House cleaners and housekeepers.
- Gardeners and yard workers.
- Cooks and drivers.
Publication 926 says a worker who controls how the work is done, for example one who brings their own tools and offers services to the public as an independent business, isn’t your employee. Neither is a worker provided by an agency that controls what work is done and how.
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
Do I need payroll software to employ a nanny?
Not necessarily. Some household employers use a payroll service; others work out pay themselves with IRS guidance. Either way, PayDocs can lay out the pay stub from the figures you arrive at.
Do I have to give my nanny a W-2?
If you had to withhold Social Security and Medicare (cash wages of $3,000 or more in 2026) or you withheld federal income tax, Publication 926 says to give your employee Copies B, C and 2 of Form W-2 by February 1, 2027, and send Copy A with Form W-3 to the Social Security Administration by the same date.
Sources
- IRS — Publication 926, Household Employer’s Tax Guide
- IRS — About Schedule H (Form 1040), Household Employment Taxes
- IRS — General Instructions for Forms W-2 and W-3 (2026)
Official sources checked October 4, 2026. This guide explains how pay documents work; it is not tax or legal advice.
