8 Min. Read

8 Best Nanny Payroll Services for Household Employers

November 8, 2024

Nanny services assist parents in juggling childcare and employment. Finding the perfect individual for your family is frequently the most difficult step. However, if you hire a home employee, you will need to alert the Internal Revenue Service so that they won’t come after you for any unpaid taxes.

Large fines may be imposed for failure to file Schedule H (household employment taxes) and payroll taxes. According to previously released IRS data, “just 5.3% of household employers submit Schedule H” and properly demonstrate nanny tax compliance.

This led the IRS to crack down on nanny tax compliance, along with a number of high-profile incidents.

Thankfully, there are numerous nanny payroll service systems available to automate all or part of the payroll procedure. To assist you in locating the ideal answer, we’ve put together a list of the 8 best nanny payroll services for household employers.

Read on as we take a closer look.

Table of Contents

FAQS on Nanny Payroll

FreshBooks

FreshBooks has paired up with Gusto, a small business-focused payroll solution that is simple to use and easily integrated with FreshBooks. In addition to countless other services, they offer unlimited payrolls, automatic tax filing and payment, and direct deposit.

A quick and simple setup allows Gusto to fully connect with FreshBooks, and if you need assistance, you can obtain step-by-step support.

Access limitless payrolls, automatic tax filing and tax payments, direct deposit, W-2s, and 1099s. Additionally, FreshBooks automatically adds every payroll transaction as a cost to your account.

Pros

Automated payroll tax services filing
FreshBooks integrates with multiple payroll providers
Exclusive access to our Select Support and Onboarding teams to train your team and migrate your books from other platforms
Access to lower credit card fees and transaction rates
2 free team member accounts

Cons

Although Freshbook’s features cover every base, they aren’t specifically set up for nanny payroll

Accounting Plus Payroll Together at Last

SurePayroll

SurePayroll was the first business to offer online payroll for small businesses in 2000, and it has since provided a user-friendly, adaptable service at a reasonable price. Its Nanny and Household plan enables you to pay your employee while ensuring that you adhere to all applicable tax-related regulatory requirements.

SurePayroll started out as a small business service but quickly expanded its selection to include a cloud-based solution for nanny payroll. SurePayroll offers simple-to-use mobile tools and an assurance that taxes will be filed. Making it a great choice for parents.

Pros

Full-service tax filing and calculation
Runs of automatic payroll
Dependable mobile app for payroll on the go

Cons

Higher starting price compared to some rivals
Processing payroll just for two days

Savvy Nanny

It can get expensive adding extra employees to your payroll if you work with multiple types of childcare providers. For example, you could have after-school nannies, full-time summer nannies, weekend babysitters. This is because some organizations charge extra for each additional payee.

But Savvy Nanny helps you out in this regard as you simply pay an additional $6 per person after the first two employees are covered by the one flat rate.

This makes Savvy Nanny payroll software a very affordable choice for households that employ more than one childcare professional.

Pros

Flat rate additional employee payment
Affordable option
An interface that is user friendly
No contracts are required

Cons

In some places, it is impossible to process county or city taxes
The service does not assist you in obtaining an EIN

Wave

Payroll by Wave is a versatile alternative that enables you to halt payroll without incurring any fees for however long you need to—while keeping your account open. This means that you’re only paying for employees that are currently working, making it a great choice for keeping track of seasonal childcare professional hirings.

Even if some of your personnel only work a portion of the year, Wave Payroll makes it simple to keep track of pay periods, taxes, and nanny information. You can locate their name and reactivate your employee so that you don’t have to submit information each time a nanny returns to your family. Wave Payroll stands apart from other software because of its offboarding features even though it is great for year-round use.

Pros

30-day risk-free trial
100% accuracy is assured
Easy-to-use dashboard

Cons

Only 14 states offer full service.
No mobile app
No integrations with outside parties

HomePay

The most expensive choice on our ranking of the top nanny payroll services is HomePay by Care.com. It handles every step of the procedure, including adding your employee to its database, processing payroll, and handling taxes. Your employee can access a self-service portal, and you have unlimited access to pay your payroll records.

“Concierge support” is offered by HomePay. This entails that you will always have access to phone, chat, email, technical support for your employee’s onboarding, and audit support, as needed.

Pros

Creates accounts for new household employers for federal and state taxes
Maintains records of PTO accruals and other payments
Experts on staff to provide compliance advice
Access to the network of household helpers and caregivers on Care.com

Cons

Doesn’t prepare local taxes, file them, or pay them
Year-end tax preparation is more expensive.
Access to employee health insurance policies is restricted

Poppins Payroll

A list of nanny payroll services wouldn’t be complete without a company that references the infamous Mary Poppins.

One of the best things about Poppins Payroll is their user interface. It’s colorful and enjoyable to interact with, and it lists out its services and fees with complete and utter transparency.

Poppins Payroll takes care of your tax preparation, payroll and tax computations, tracking of PTO and sick leave, and new company registration. Yet, its offerings are modest when directly compared to the rest of the options on this list.

Pros

Low costs
Extensive accounting
High level of usability

Cons

Only available in select states
Has a modest set of offerings

GTM Payroll Services

GTM Payroll Services manages your payments and benefits with ease as a qualified insurance and benefits broker. You may find and keep a nanny by offering advantages like a 401(k) plan or by complying with your state’s workplace compensation insurance requirements.

They are also able to organize your employee’s workers’ compensation, health, dental, and vision insurance as well as their tax-savings programme.

GTM Payroll Services is one of the top payroll companies for providing employee benefits because it is also a certified broker and offers a wide selection of benefits in 28 states.

Pros

Numerous benefit alternatives
Adaptive client services
No assurance of tax penalties

Cons

There must be a six-month contract.
Expensive setup fees
more costly than other offerings

NannyChex

Your payroll is completely handled by NannyChex, including recording of PTO or sick time.

NannyChex is an all-in-one system designed exclusively for paying home employees. Get free assistance with each payroll step, then automate it to eliminate your concern over quarterly or annual tax compliance. This economical payroll solution offers everything you require, making it the most complete choice.

You’ll even be assigned a personal account representative, allowing you to contact them directly if you have queries or issues with your account.

Pros

No contract is necessary
Manages all local taxes across all 50 states
Unlimited free support

Cons

No mobile app
Additional charges for processing payroll
Exorbitant year-end costs

Key Takeaways

FreshBooks and Gusto’s payroll services are your best option if you’re looking for a nanny payroll provider with easy software setup, friendly customer service, and affordable cost.

However, FreshBooks is by no means your only option. The best nanny payroll services that we choose also have a lot going for them.

But as with any choice, you should always pair advice with your own research. Nobody knows better than you what kind of Nanny payroll service you’re looking for, so make sure you find one that fits all of your individual needs.

FAQS on Nanny Payroll

Do I Need a Nanny Payroll?

Nanny payroll takes a lot of stress away from the financial organization side of hiring a nanny.

How Does the Nanny Tax Work?

If you pay your nanny employee $2,700 or more in cash wages in 2024, you must lawfully deduct FICA taxes from their pay. There is one flat rate for these taxes.

Can a Nanny File as Self-Employed?

The IRS views you as household employees, not an independent contractor, if you are a nanny or other caregiver who looks after others’ children in the home of your employer. And you have been given particular job responsibilities as a household employee.