Hiring a Nanny, Housekeeper or Caregiver? Financial Tips for Household Employers

Thinking about hiring a nanny, housekeeper or caregiver? Make sure you understand your obligations as a household employer as far as taxes, payroll, W-2s and even insurance go.

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After years of putting it off, my husband and I finally decided to hire a nanny to take care of our children after school. We could have taken the easy way out by using an outside service, but we really wanted to establish a long-lasting relationship with a qualified, caring individual I found on my own.

Fortunately, we found the right person. And, suddenly, we had to take a crash course in understanding what it means to be an employer. How to ensure that our nanny could legally work for us. How to set up a payroll system. How to calculate the taxes we’d need to withdraw from her paycheck.

Even though I am a financial planner, my experience and credentials didn’t fully prepare me for this new role. Fortunately, I was able to get great advice from my accountant and by reading useful publications like the IRS Household Employer’s Tax Guide (opens in new tab).

If you’ve been thinking about hiring in-home help, whether it’s a nanny, housekeeper, maid, driver, personal chef, gardener or someone else, feel free to learn from my experiences in becoming a newly minted household employer.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC (opens in new tab) or with FINRA (opens in new tab).

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Joelle Spear, CFP®
Financial Adviser, Partner, Canby Financial Advisors

Joelle Spear, CFP® is a financial adviser and a partner at Canby Financial Advisors (opens in new tab) in Framingham, Mass. She has an MBA with a finance concentration from Bentley University.
Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser.