Which Nanny Payroll Service?

Parent Q&A

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How does nanny payroll/taxes work? Worth it to use agency?
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Mar 31, 2025

Hi there, I'm a first time mom learning about childcare options and am already feeling somewhat overwhelmed. I would like to hire a part-time nanny for my baby once my maternity leave is over, but I am confused about how nanny payroll works. I've heard of using a payroll app, or going through an agency. Does the agency help set up all the employer IDs/tax info for you?

What do experienced hirers recommend? Thank you for any insight!

Mar 31, 2025

We use Poppins Payroll and have found it to be super easy. They helped us get an EIN and do all of the taxes. Basically all I have to do is have our bank account linked and enter her hours every week. There are other, similar services out there, but we chose Poppins because it was a little bit more cost effective when we first looked three years ago. For our circumstances I feel strongly about hiring above board and having our nanny be an employee, but lots of people pay cash and don't worry about any of this.

Apr 2, 2025

We love poppinspayroll, it's very easy and yes they set up all the IDs for you. I don't have any experience with an agency, but typically they require a significant up front fee, and I'm not sure they would necessarily handle payroll. There are so many great nannies available locally that I'm not sure an agency is needed, but it may provide some peace of mind if you are wary about the process.

Apr 2, 2025

Yes, if you are hiring a nanny directly and paying them more than ~$2,500 per year then you are considered an employer and must file taxes and paperwork with CA and the IRS accordingly. There are products out there to streamline this. We used Poppins for this, and the cost is reasonable at $49/month. They handle getting you registered as an employer, tracking sick leave, handling the forms you need to give the nanny for their tax purposes, etc. It was a pain, but it worked well. Here is their site: https://www.poppinspayroll.com/

Of course many people around here just pay their nannies under the table. The nannies often prefer that as well. You'll often need to pay a higher rate so that their take-home pay ends up being the market rate after taxes are taken out.

To me the risk of paying under the table was not worth it, so we did everything above board. But it's much harder and more expensive, for sure.

Apr 2, 2025

Payroll agencies or apps are very accessible and easy to use. Your life will be much easier.

We use Homepay ( I believe it's one of the more expensive ones.) and has had great success over many years.
In When tax season comes around, the W-2 is issued through the app and easy for the Nanny to access.
I've also heard Poppins is a great app and a little bit cheaper but I know there's a few more out there.
SurePayroll, GTM Payroll Services, or Savvy Nanny Payroll Services, can be good, but I've heard some issues with all of those.
All are easy, set up and so easy to use.

Apr 2, 2025

I use a service and can't imagine trying to do it on my own. Worth the $. Also worth doing this the legal way instead of paying under the table. My nanny applied for a home loan last year and had to show legal wages to qualify. I was glad she was able to do it. The service I use is Savvy Nanny Payroll www.savvynannypayrollservices.com I like it. It is based here in Berkeley. Once you are set up in their system, you just log in hours your nanny works and you can pay direct deposit through the service. They automate taking taxes out so there is really not anything to do there. Setting up the account is pretty straightforward. You do need to get a Federal EIN and State account numbers but they provide instruction on that and it really wasn't hard at all. If you go through an agency you will be paying the agency on top of your nanny and that can be a lot. There are so many qualified nannies advertising on BPN that an agency is not really necessary. You will save money and your nanny will make more money without the middleman imho. Good luck!

Apr 2, 2025

Unless you're a CPA or finance whiz, get an agency. It's worth the peace of mind. There a ton of forms to do, and you don't want to do it all on your own.

I like Poppins Payroll since they help set up the employer IDs/handle taxes for me and send a summary at the end of every quarter and every year for your accountant or for you to do your taxes with.

They estimate it's 60 hours of work to do it on your own every year to comply with all the paperwork://www.poppinspayroll.com/nanny-taxes-california

Message me your email if you want me to refer you - they had a deal for a month of free payroll ($49 value) to "refer a friend" - https://www.facebook.com/Poppinspayroll/posts/here-at-poppins-we-let-our-clients-do-the-talking-and-we-love-hearing-from-them-/1673924946148114/

Note that you will also need to get Workers' Comp insurance, which is in addition to the payroll service ($500-1000+ a year depending on part time/full time etc).

Apr 2, 2025

In my experience the majority of nannies in the Bay Area prefer to be paid under the table (cash), so if that is something that could work for you and your family, you’d avoid a lot of hassle and likely have many more nannies willing to work for you. Some families want or need to pay above board, for personal or professional reasons, but it can really limit your options. In my experience the vast majority of families here pay under the table.

If you do opt to pay above board, you’ll have to register with the state as a household employer, and then there are a number of apps out there that can help you track payroll (I think the one we used years ago was called NannyPay? Not sure if it’s still out there). If I remember correctly we really just used the app to calculate withholding correctly and generate tax statements for both our nanny and ourselves, and then just paid her via personal check. It was honestly quite a headache on top of everything else that goes along with being a working parent. I didn’t consider an agency as we were trying to keep costs down, so can’t speak to what they offer. Good luck!

Apr 2, 2025

We used Poppins Payroll. My husband handled the logistics of it, but i know it was relatively easy for him to set up and manage.

Apr 2, 2025

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Cash vs Payroll Service for Nanny Share?
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Dec 11, 2022

What payroll services do you recommend using for taking care of all tax filings for a nanny? Is there any insurance that should be purchased?

What do you recommend telling a nanny that requests cash vs payroll for payment?

Dec 11, 2022

When my family worked with a nanny, we used Homework Solutions for payroll. They helped with the entire process from getting an employer ID, to the documents the nanny needed to fill out, to sending the payments and tax forms. I'm not sure there are substantial differences between the different payroll companies, but you DEFINITELY want to use one (if going over the table), unless you have personal expertise and automation of tasks in this area.

For insurance, you're supposed to purchase workers comp for the nanny. Additionally, it is common to provide a health insurance 'subsidy' (a couple hundred a month) to contribute to their purchase of health insurance, if they do not have it through a spouse.

Paying in cash vs using payroll (under vs over the table): this is something that family and nanny must agree to, and may be an irreconcilable difference otherwise. There are legit reasons nanny or family might want either arrangement, so everyone must be on the same page.

Dec 14, 2022

If you are relatively Excel savvy, it isn't hard to do on on your own--the state has a very good guide to tax filings for domestic workers. I'm sure others will suggest the services they have used and liked, too. You'll need to have workers' comp insurance, but this should be covered under your homeowners' or renter's policy since California now requires that. (Call to confirm, and if you rent but don't have insurance, get a policy.) You can certainly pay in cash and still withhold the needed payroll taxes--payment doesn't need to be via a payroll service or by check to do that, though I liked paying by check to have good records. If the nanny is asking you to pay cash so that it's under the table, though, that's different and you'll need to decide if you're willing to do it. (We were not willing to for a number of reasons, so just said upfront that we would only pay legally when interviewing prospective nannies and talking with nannyshare partners.)

Dec 14, 2022

We had a good experience with using HomePay from care.com. You need to get worker's compensation insurance, which can be purchased through your usual insurance carrier. We got it through State Farm.

For us, it was not worth the risk to pay cash under the table. There are big tax penalties for you as an employer if you choose to pay cash and other risks.

When interviewing nannies, some who requested cash were willing to use a service, but they expected us to gross up and pay their portion of taxes as well. They essentially wanted to negotiate their take home pay, not their actual hourly wage. We ended up hiring someone who preferred to be paid via a service with taxes taken out and workers' comp protection. This method protects them as well as you. You can remind them that if you end up letting go of the nanny when your kid goes to preschool, for example, they may be eligible for unemployment. If they end up getting hurt at work, such as a car accident or a fall, they and you would be protected. If not, and there is an injury, you could end up being responsible for medical costs and lost wages out of pocket as well as back taxes and penalties.

In addition to tax filings and pay stubs, Care.com/Homepay also tracked holiday pay, vacation and sick time usage and accrual. When our nanny left, she had accrued a vacation day she hadn't used yet, so we paid her for that on her last day, as required by CA law. It was nice to have everything handled for us by Homepay so we didn't have to wonder if we were in compliance.

Lots of people do pay cash, but it's not legal and wasn't worth it to us.

Dec 14, 2022

I use Poppins Payroll and have been very happy with them. Their website is user friendly, their customer service responds quickly and they've done all the taxes no problem.

You need workers' comp insurance for residence employees. If you have homeowners' insurance, read the fine print as it might already be included.

If you pay cash under the table and get found out you'll be in a lot of hot water with the IRS. If it turns out your nanny's request for cash was because they're not legally allowed to work in the US, you're in even more trouble. Not worth it. I would just tell them that your offer is to pay them through a payroll service.

Dec 14, 2022

We have had a good experience with Poppins Payroll. When I was recently looking for a nanny, I found the vast majority wanted to be paid in cash so I ended up using willingness to be paid w taxes withheld as a screening factor before interviewing and making it clear in posts that that was a parameter of the job we were offering

Dec 14, 2022

BPN moderator here. Just some data for you. BPN has conducted five nanny surveys, most recently in 2021. We always ask whether parents pay their nanny under the table or over the table, and the answers have been pretty consistent over the years: more than 70% of respondents say they pay their nanny under the table. When we ask why they don't report the nanny's earnings as required, the most frequent response by far is that their nanny asked them not to, most often because the nanny is worried about losing income-based benefits such as medical insurance or subsidized childcare. Some parents have also commented that they do report a portion of the nanny's income so they qualify for SDI, social security, etc. Parents have also mentioned on the surveys that it's hard to find a nanny who wants to be paid over the table. View past surveys here.

Dec 16, 2022
Nanny payroll services
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Feb 21, 2022

Hi there!

I'd appreciate advice on nanny payroll services. Unfortunately, all the posts about nanny payroll services are quite old. I'm interested in recommendations along with specific feedback (pros/cons) on the service. For example, I've heard good things about Poppins, HomePay (now Care.com) and GTM specifically. Beyond costs, are there ones that are better than others?

Thank you!

Dany

Feb 21, 2022

I'm new to this whole thing, but we use Poppins and I'm pretty happy with it. The setup is a little bit confusing, as the product is fairly bare bones, but the customer service was quite prompt and helpful when I ran into trouble. It was just a bit weird to wrap my head around the payroll schedule. But they handle all of the tax filing and everything you need, for a very reasonable cost of $45/month. I liked that it was a very focused product, not the piece of some huge platform where they are constantly trying to up-sell you.

Feb 23, 2022

We just hired a nanny and her previous employer used SurePayroll. She, and the other family, had good things to say about it, so we have signed up and are using it as well. Both families from our nanny share arrangement were able to sign up without much issue. Their customer service response has been really good and have made she all our questions were answered. Having never been an employer before, I had a lot of questions! Also, the dashboard UI is clean and easy to understand. The fee is $50/month per family which I think is worth it. Here's a link to check it out and sign up! Best of luck!

Feb 23, 2022

We use Poppins, and it's been a good experience in general (although I can't speak to any of the alternatives). They took care of everything for onboarding & taxes. We've had a few minor issues come up as we got used to using the service, but their support was responsive and helpful.

One thing to note is that, if you use their direct deposit service to pay the nanny, the timing is inflexible—the deposit is always made a week after the pay period ends. Our nanny wanted to be paid on the final day of the pay period, rather than waiting a week, so we ended up needing to pay by check rather than using Poppins for direct deposit.

Feb 23, 2022

I've been super happy with Poppins. They are easy to use (both sign up and making payroll adjustments) and efficient. I sent them an email on a Saturday evening in December with a completely non-urgent question about adding a holiday bonus, and they responded less than an hour later. I was dreading figuring out my taxes but they calculated all my estimated taxes perfectly and sent all the forms I needed so it ended up being no extra hassle at all.

Feb 23, 2022

Hi Dany,

We’re using Poppins and have found it relatively easy to set up and pretty seamless in terms of payroll. Admittedly we’ve only been using since January but so far seems good. Also, when I made a mistake in the set up process, their customer service was excellent - answered my call immediately and solved the issue easily. I’d recommend.

Good luck!

Feb 23, 2022

I can't offer much in terms of pros and cons but we used Poppins and had no issues. The nanny was happy with how it worked/the system reliably made the transfer each week, my husband was able to get customer service when needed, and generate the needed tax docs at end of year.

Feb 23, 2022

I can't say that I can do a comparison. A trusted friend of mine used GTM and recommended it to me, so that's how I started using GTM!

Although, GTM doesn't do workers' comp in the state of California. (My friend's in Boston.) I got workers' comp through my renter's insurance. You should be able to also do it through your homeowners' insurance if you own your home.

I can't get into more detail about how it works. My husband does the payroll, it was the only thing I asked him to do about kid stuff, haha. But they did call him to help him set up everything. When he called, someone picked up right away every time. So it had great customer service, as far as I can tell! He added me for email notifications and I get updates from them every week about stuff.

Feb 23, 2022
Payroll service for over the table nanny pay?
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Jul 1, 2020

We live in El Cerrito and plan to have a nanny care for our two children (ages 3 and 1) this fall. What is the going rate for a nanny caring for two children in the Bay Area? Websites we consulted seem to be too low and inaccurate. Also, we wanted to pay our nanny over the table. Does anyone have any experience with payroll companies? Any recommendations? Thank you!

Jul 1, 2020

We love Savvy Nanny Payroll services. They are straightforward, reliable and ethical. Owner Laila Stone is a real gem. https://savvynannypayrollservices.com/

Jul 13, 2020
Nanny payroll system recommendation
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Jul 1, 2019

Hello parents! My husband and I will be starting a nanny share with another family. What payroll systems do other parents use to pay their nannies? Any advice or past experiences helpful - thank you!

Jul 1, 2019

I've been using Poppins Payroll and it is excellent. Also the most affordable of the ones I priced when I did my search about a year ago. They are also very responsive to questions and concerns via email.

Jul 3, 2019

Poppins Payroll is fantastic :) they handle everything. They do have a monthly fee of about $40 if that's a factor for you.

Jul 3, 2019

We've been using Poppins Payroll to pay our Nanny. We're also in a share. Both families manage their own Poppins Payroll account and associated bi-weekly payroll so that our Nanny gets a direct deposit from each family. Poppins automatically takes care of the quarterly taxes so you don't have to worry about handling those. Poppins monthly fee is also significantly cheaper than the other popular payroll sites.

Jul 3, 2019

We have been using NannyChex for the last quarter and so far it’s been easy to use and set up! It was on the more affordable side of options we looked at, but seems to provide the core features we need.

Jul 3, 2019

We used Breedlove several years ago and had a good experience.

Jul 3, 2019

I use an app called NannyPay. It’s pretty basic but helps you create time cards and pay statements very easily, and has some helpful guidance on taxes. You set up the actual payment (bank transfer, etc) separately. $5/month and all done from your phone!

Jul 4, 2019

I looked into this just last month for a nannyshare, and ended up choosing NannyPay which calculates all taxes, but we are responsible for paying both the nanny and making the tax payments. They make it easy, calculating what we each owe each quarter and what we should pay at payday, and filling out all tax forms. Forms include end of year Schedule H to file with your taxes, and the W-2 to give your nanny. As of spring 2019, the annual fee for NannyPay is $149.95 and you license it for use on a specific computer (it's not cloud-based). This was significantly less annually than the other options I looked into, which included $480 for Poppins, $695 for NannyChex, $940 for Care.com's HomePay (formerly Breedlove). These more expensive options DO file the taxes directly for you and some of them manage payment to the nanny too - so they are more full service.

Each family needs to manage their own tax payments, so you'll each need a solution, though they don't need to be the same one.

Jul 10, 2019
Recommendations on how to do Nanny Payroll?
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Sep 27, 2016

Do you have any recommendations/advice on efficient, economical ways on how to handle payroll for a full time Nanny? (e.g. HomePay from Care.com, Intuit Payroll, accountant)?

Sep 27, 2016

Hello - We've used SurePayroll for years with a lot of success and have referred them to others who also have liked working with them. Feel free to reach out for a formal referral. Through a referral, we both get some $ off.

Sep 29, 2016
Nanny share - going rates, services for paying taxes and withholding
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Jul 30, 2016

We are currently exploring the possibility of setting up a nanny share and talking to potential partner families. If you are in this situation, and can provide advice on any of the following, it would be much appreciated:

1) what are you paying for a two child nanny share, per child per hour? Please specify net or gross!

2) What do people do about reporting income to state and federal authorities and also about withholding? Do most people simply pay the nanny gross wages (and pay the govt payroll (employer side) taxes) and leave it to the nanny to pay income tax, SDI, etc.? Or is it more common practice for the employer to handle all of these things for the nanny?

3) what service, if any, do you use to calculate employer side tax, and various deductions from nanny wages? It looks like you can do this manually yourself, but it is fairly complicated. I have heard good things about Care.com, but is more expensive, and I've also read that Sure Payroll is very good but less expensive.

4) most of the information I've seen online concerns one household employer and one nanny. How do you handle all of this with two households paying one nanny's wages?

5) any other hot tips or "things you wish you'd known" before you started this process would be much appreciated!

Jul 30, 2016

I would strongly encourage you to consult a tax attny. But to give you some info/things to consider in case it's helpful: We don't do a nanny share but pay our nanny over the table via Intuit's payroll service. It costs $22/month and I believe it's worth it--you plug in all the info and it calculates your taxes, populates the forms, sends reminders, etc. It also pays her via direct deposit. I don't believe it's legal for you to expect her to pay the SDI, ETT, and not withhold CA state Income tax. The CA tax payments would be fairly straightforward to split as (I think) because it's really not that much money and you pay it either quarterly or at the end of the year, but it could get a bit more complex on the federal side when you file if one family is the employer and you both want to take advantage of federal childcare credits or want to list the childcare expenses on your return. I personally would not be comfortable waiting until the end of the year to count on the other family to pony up their share of the outstanding federal taxes if we were the only one reported as the employer. I suppose you could work out an arrangement where monthly/quarterly the other family paid you their share of the withheld tax and employer-paid SS, etc. so that you don't have to worry about holding the bag on that when you file your federal return.

Aug 3, 2016

Archived Q&A and Reviews

Paying taxes for nanny
CPA to help set up Nanny Payroll
Nanny payroll service for share care?
Accountant to help with paying taxes for nanny

Paying taxes for nanny

Oct 2012

I'm confused about the different options for paying taxes for our nanny. Do we pay? Does she pay? Both? Do we do this ongoing or just at the end of the year? Please let me know your experience/knowledge with this. Thanks so much! Confused

We used paycycle.com -- now payroll.intuit.com . Go to their website and click on ''Payroll Services'' and then ''Household and Nanny Payroll'' . It's still $20 a month for paying a nanny. It will generate the checks, deal with direct deposit, calculate all the taxes, including the ones you pay and the ones your employee pays, and pre-generate tax forms (you just have to sign and mail.) It was well worth the $20 a month and I'm impressed that they haven't increased the price over the years (we last used it in 2004 or so.)

There are a couple of startup steps, like getting a household employer ID from the state or federal government. I don't know the current requirements on that, but I'm guessing the people at paycycle.com could advise you on that as well.

I recommend this type of service because it saves a lot of time and you know you're doing it all legally. loved paycycle.com

CPA to help set up Nanny Payroll

Jan 2012

I'm looking for someone to help set up payroll and tax documents for us with our nanny. It seems to be a somewhat specialized task and we use an out of state CPA for other things so someone familiar with the laws here would be of great assistance. Does anyone have someone they like who they can suggest? Hana

I can't recommend a CPA, but I've had great success with Quicken's Intuit Payroll: https://www.paycycle.com/external/home.jsp They assist with all paperwork setup, and have been good to work with (recently they just called to tell me that I needed to change a form -- nice to have someone tell me this). It's $20 month for one employee, and unless your situation is complicated it would probably fit the bill, and you can still use your other CPA for actual filing of taxes. -also paying nanny taxes

Our accountant recommended Breedlove so we used them for a few years while we had a nanny. Their service was good although pricey. http://www.breedlove-online.com/

Nanny payroll service for share care?

June 2009

We're considering using a nanny payroll service for our share care. Is this worth doing? If so, what service would you recommend? (I saw a few reviews of Breedlove & Associates and paycycle in the archives, but these are a bit old.) Also, have any of you had experience using a payroll service for a share care? Would love any tips you have on doing this. Thank you! Going legal

I highly recommend an internet service ''PayCycle''. The phone in
support is great and they keep up to date. You have to follow the to-do list they generate for you to keep up with forms. If you are good on the computer it is a great option. Compare the price at least with a payroll service. Elizabeth

Accountant to help with paying taxes for nanny

April 2007

hi. i searched the archives but couldn't find any recommendations for an accountant who can do the paperwork to pay the quarterly/annual taxes, social security, etc. for our nanny. any recommendations would be much appreciated. thank you. Patsy

Give Breedlove a call. Everything can be done via phone and internet. It's really easy and they are very accurate, responsive and nice. http://www.breedlove-online.com/ 888-BREEDLOVE (273-3356) Easy peasy! Keley

We use an online service called PayCycle to do the paperwork with all related nanny taxes, weekly paycheck summaries, vacation/holiday/sick pay tracking, etc. They provide regular reminders for all of the related tasks and their Customer Support Team has been very responsive to the few inquiries I've had. It's $19.99/month, which is far less than what my CPA would charge. I've been very happy with the service. You can see a demo at www.paycycle.com. A happy customer