If you’ve hired a nanny or other in-home caregiver, a nanny payroll service helps you comply with household employment laws such as the nanny tax. While using a service may seem unnecessary, it could be a good idea if you don’t have the time, desire, or know-how to pay your nanny legally on your own. Every nanny payroll service has different features to meet a wide variety of needs.
The best nanny payroll services are widely available, budget-friendly, comprehensive, and offer stellar customer support. We examined eleven nanny payroll companies before selecting our top picks. Keep reading to see which service might work best for your family.
Best Overall : SurePayroll®
Why We Chose It: SurePayroll® took our top spot because it’s the most well-rounded full-service company and is operated by the trusted payroll service Paychex.
Well-rounded and reputable full-service company
Easy, unlimited, and automated payroll processing
Tax filings are guaranteed accurate
No health insurance or retirement benefits are available
SurePayroll® was founded in 2000 and was the first to offer online payroll services. Available in all 50 states, the service is easy to set up and easy to use.
You can process payroll from your computer or the SurePayroll® mobile app in three steps:
- Enter the nanny’s salary or number of hours worked
- Review the payroll and tax calculations
- Approve what you see
The full-service payroll company offers the following features:
- Unlimited payroll processing including same day or next day
- Automated payroll processing
- Multiple pay rates and bonuses if needed
- Direct deposit into your employee’s bank account
- Quarterly tax filing and remittance
- Year-end tax document preparation, including Schedule H for your return and W2s
- An online portal for your nanny to view pay stubs and W2s
- Tax-related reporting for any benefits you provide to your nanny
SurePayroll® guarantees their tax filings. If the company makes a mistake, it will pay any penalties assessed.
The service runs $49.99 per month for one employee, and you can add additional employees for $10 each per month. You won't have to commit to a contract or pay any setup fees. The company is currently (as of January 2021) offering a one-month free trial.
If you need to suspend your service for any reason, you can do so for a “nominal fee.” SurePayroll® will continue to prepare and file your taxes for the rest of the year.
The company can give you a quote for workers’ compensation. That way, your household is protected in case your nanny is injured while on the job.
When you need assistance, live, U.S.-based customer support is available six days a week. Representatives are ready to help from 7 a.m. to 8 p.m. CST Monday to Friday and during limited hours on Saturday. You can call, email, or chat online.
Best Runner-Up : HomePay℠
Why We Chose It: HomePay℠ is easy to use, makes paying your nanny simple, and it tracks benefits like time off and reimbursements.
Easy setup and unlimited customer support
Full-service payroll solution
The service is pricey
Taxes aren’t withdrawn from your account until it’s time to remit (quarterly)
HomePay℠, a Care.com service, is high up on our list because the provider takes care of almost everything when it comes to paying your nanny. Here’s what the company does:
- Makes setting up the service simple by contacting your nanny directly for the required information
- Sets up your federal and state tax accounts
- Files new hire reports for your employee(s)
- Lets you run your payroll on any device and automated payroll processing is available
- Calculates the proper withholding and net pay
- Pays your nanny via direct deposit
- Tracks any paid time off or other benefit accruals and reimbursements
- Gives your nanny online access to their pay stubs
- Prepares, files, and pays your taxes (the company guarantees timeliness and accuracy)
- Archives your payroll and tax records for fast retrieval and grants lifetime access
- Provides guidance on labor laws pertaining to household employees
HomePay℠ can help you get workers’ compensation insurance through one of their partners. As an added perk, they also offer budget planning assistance to maximize your tax breaks.
The service is more expensive than many we looked at, coming in at $75 per month (billed quarterly). Plus, the company charges a $100 fee for year-end tax preparation services (includes Schedule H, W2, and W3). However, you’re not locked into a long-term contract, you won’t have to pay a setup fee, and you’ll get the first month for free.
Available in all 50 states, the service provides unlimited customer support to both you and your nanny. If you’re not pleased with HomePay℠, you can request a refund of service fees under the company’s happiness guarantee (within your first six months as a customer).
One potential downside to consider: the company doesn’t withdraw taxes that you owe until they submit your quarterly payments. This could make budgeting and managing your finances more difficult as you’ll need to keep track of how much money to reserve.
Best for Beginners : Nanny Lane
Why We Chose It: Nanny Lane offers a simple payroll process and expert, dedicated support.
Super simple payroll processing
Dedicated, expert customer support
Available in all 50 states
Service set up can take up to two weeks
Workers’ compensation insurance is not available
We picked Nanny Lane as the best provider for beginners of how easy it is to process payroll using the service - all you need is an email address. Each week, you’ll respond to an email requesting your nanny’s hours. You can even stipulate multiple pay rates, if applicable. If the company doesn’t hear from you for a given pay period, your nanny will get paid their default amount (automated payroll).
The service is available in all 50 states and includes:
- Federal and state employer registration
- Direct deposit payments to your nanny
- Pay stubs emailed to your nanny
- Quarterly tax filings
- Year-end tax documents, like the W2 and W3 (W2 sent directly to your nanny)
- Access to a dedicated payroll expert you can contact with questions and concerns
Nanny Lane’s payroll service can accommodate nanny share arrangements. The company can also help you find a nanny. Unfortunately, the company doesn’t handle workers’ compensation insurance, so you’ll have to consult with a third party if you need that coverage.
The service costs $55 per month for one nanny. You may add additional employees for $25 per month each. The provider doesn’t charge a setup fee or a tax filing fee.
Best for Tech and Customer Support : Nanny Chex
Why We Chose It: NannyChex provides dedicated and unlimited support to customers.
Unlimited and dedicated customer support
Free initial consultations are provided
Full-service plan includes some unique perks
Workers’ compensation insurance is not offered
Fee structure is somewhat complex
We like NannyChex because the provider assigns a personal account representative to you and you can contact them as much as you need to for no additional charge. You can also contact the company for a free initial consultation.
The firm has been in business since 1995, and the payroll service is available in all 50 states. You have two plans to choose from: tax only and full-service.
With the tax-only option, NannyChex will pay the tax agencies on your behalf for $125 per quarter. However, you’re responsible for:
- Calculating and paying your nanny’s after-tax wages (the company provides a calculator)
- Reporting all of the wages paid and taxes withheld to the company each quarter
- Paying the lump sum of taxes owed to NannyChex for disbursement to the tax authorities
At the end of the year, for an additional $195, the provider will prepare Schedule H, Form W2, and Form W3.
With the full-service option, you won’t have to deal with any of the above. NannyChex will take care of establishing your federal and state tax accounts, calculating paychecks, paying your nanny through direct deposit, and collecting taxes owed with each pay cycle. Your nanny will also be able to view their pay stubs online.
If you pay your nanny weekly, the full-service plan runs $6.25 per paycheck. If you pay bi-weekly, semi-monthly, or monthly, it costs $12.50 per paycheck. Quarterly tax filings are $80, and year-end tax preparation is $150 (includes Schedule H, W2, and W3). You won’t have to pay to sign up or to get registered as a household employer. Plus, there’s no commitment - you pay as you go.
The full-service plan also includes:
- Paid time off tracking
- Employment verifications
- Unemployment claim responses
- Maintenance and storage of payroll and tax records
Best for Nanny Benefits : GTM® Payroll Services
Why We Chose It: GTM® Payroll Services won this category since they offer a wide range of benefits for your nanny.
Wide range of nanny benefits
Unlimited access to expert guidance and support
Six-month minimum commitment
Complex, pricey fee structure
Insurance brokers only available in 29 states
We like GTM® Payroll Services because the provider lets you reward your nanny beyond giving them a paycheck. You can help protect their health, well-being, and financial future by offering employee benefits.
The company has licensed insurance and benefits brokers in 29 states. Going through them, you can provide your nanny with workers’ compensation insurance, health insurance, and a retirement savings account. If brokers aren’t available in your state, you can still secure benefits from a third party and use GTM® to handle the tax and payroll reporting.
The provider’s payroll service, EasyPay®, is available in all 50 states. It’s simple to get started and use. You can run an automated payroll or make changes quickly and easily from any device. Your nanny will have access to their pay stubs and W2s online. GTM® Payroll Services will also take care of your tax filings.
Unfortunately, GTM® requires a six-month minimum commitment. The provider charges a $95 set up fee, $65 per month for one employee ($20 per month for each additional employee), and approximately $100 for year-end tax preparation (includes Schedule H, W2, and W3).
Their benefits services and nanny background checks come at an additional cost. Those fees are not published on the company’s website.
GTM® provides unlimited customer support. You’ll have access to a team of certified payroll professionals, insurance brokers, domestic employment specialists, and certified public accountants Monday to Friday, 8:30 a.m. to 8 p.m. EST. The company also offers free initial phone consultations to help determine your needs.
Best Low-Cost Option : Payroll4free.com
Why We Chose It: We selected Payroll4free.com as the best low-cost option since the most you’ll pay is $30 per month.
Can run payroll for little or no money
Live, U.S.-based customer support
Can’t run automated payroll
Free software contains ads, which may be distracting
With Payroll4free.com, you can get payroll processing assistance at low or no cost. The provider’s basic plan is free. Plan add ons can bring the price to $30 per month.
The basic plan covers employers with twenty-five or fewer employees and is available nationwide. The service includes:
- Payroll processing
- Direct deposit
- Tax calculation and form preparation
- Detailed reporting
You can run payroll at whatever interval works for you (weekly, bi-weekly, semi-monthly, or monthly). The system can handle any earning, deduction, benefit, or contribution. You’re also able to track paid time off. Your nanny can view their pay stubs and W2s via an online portal.
Set up is fast and straightforward. An online tool walks you through the entire process. Paying your nanny is also easy, but you can’t run an automated payroll.
When you have questions or concerns, you’ll receive live, U.S.-based support. If you need workers’ compensation insurance, Payroll4free.com may be able to refer you to one of its partners.
The free plan does not include filing and paying your taxes. If you want this taken care of, it will cost you $15 per month. For an additional $15 per month, you can also use the company’s bank to pay your nanny.
Nanny payroll services have been around for decades, so there are many options out there to compare. That means it can be difficult and time-consuming to find the right service for your household. But, after weighing features, availability, customer support, and price, we’ve chosen SurePayroll® as the best nanny payroll service.
However, before you choose a particular service, we encourage you to do additional research. That way, you’re sure to select the right company for your family’s needs.
|Service Provider||Why We Chose It||Cost|
|SurePayroll®||Well-rounded, reputable service||$49.99 per month for one nanny $10 per month for each additional employee|
|HomePay℠||Guaranteed customer satisfaction||$75 per month $100 for year-end tax preparation|
|Nanny Lane||Novice-friendly product and service||$55 per month for one nanny $25 per month for each additional employee|
|NannyChex||Top-notch customer support||$125 per quarter and $195 at year-end for the tax only service $6.25-$12.50 per paycheck, $80 for quarterly tax filing, and $150 for year-end tax preparation for the full-service plan|
|GTM® Payroll Services||Wide array of nanny benefits||$95 set up fee $65 per month for one nanny $20 per month for each additional employee $100 for year-end tax preparation|
|Payroll4free.com||Budget-friendly payroll option||$0 for basic plan $15 per month for tax filing and payment $15 per month to use the company’s bank|
What Is a Nanny Payroll Service?
A nanny payroll service is a service that helps you pay your nanny or other household employees in compliance with labor and tax laws. The service ensures that you’ve paid any nanny tax that you owe. Typically, a nanny payroll company calculates wages and taxes for your nanny, pays them via direct deposit, remits related taxes to the appropriate agencies, provides year-end tax forms, and keeps detailed payroll and tax records.
How Does a Nanny Payroll Service Work?
A nanny payroll service takes on some or all of your payroll processing and related tax preparation duties. To get started, you and your nanny provide some basic information to the company. Then, each pay period, you stipulate how much your nanny should get paid. Full-service plans calculate the payment, pay your nanny, send taxes to the proper authorities, prepare year-end tax documents, and maintain required records.
How Much Does It Cost To Use a Nanny Payroll Service?
Nanny payroll services range in price. Basic services are available for low or no cost. More robust, full-service offerings can run up to $75 per month or more. Some companies charge an all-inclusive rate, while others charge separate fees for different aspects of the service.
Who Needs a Nanny Payroll Service?
A nanny payroll service might be right for you if you’ve hired a nanny or other household employee and you’re uncomfortable handling payroll on your own. The service can save you time and hassle. It can also prevent future tax penalties from inadvertently being out of compliance with tax and labor laws.
What Is a Nanny Tax and Do I Need To Pay It?
The nanny tax is a federal tax that household employers need to pay if they compensate their nanny or other household employees above a given threshold. If you pay your nanny more than $2,300 in 2021, you must withhold 7.65% of their pay to cover Social Security and Medicare taxes. As their employer, you also have to pay a matching 7.65%. Plus, you’ll need to pay unemployment taxes on the first $7,000 you pay your nanny if they earn more than $1,000 in a quarter.
How We Chose the Best Nanny Payroll Service
We carefully went through eleven nanny payroll services before making our top choices. We evaluated each service for its features, level of customer support provided, availability, and price. Since nanny payroll services have been around for quite a while, we also factored in company longevity and general reputation.
All of our category winners pay your nanny, file your related taxes, maintain required payroll and tax documentation, and offer customer support when you need assistance.