Nest Payroll

Pay Your Household Employee Legally in Minutes

Payroll service (show on map)

2.0

★★☆☆☆

1 reviews

Nest Payroll offers affordable household payroll services starting at $42/month, handling taxes, filings, and compliance for families employing nannies and other domestic workers across all 50 states.

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About

Nest Payroll is a household payroll service designed to simplify tax compliance for families employing domestic workers. For $42/month, the service handles federal and state tax withholdings, quarterly filings, year-end W-2s, W-3s, and Schedule H forms.

The company manages EIN registration, state tax account setup, and all required compliance filings. Nest Payroll serves households employing nannies, babysitters, au pairs, senior caregivers, housekeepers, personal assistants, and other household workers. The service is available in all 50 states with a 5-minute setup time and includes access to payroll calculators, catch-up tax services for past non-compliant years, and year-end tax documentation.

Set up in 5 minutes

$42/month all-inclusive pricing

Covers all 50 states

Handles EIN and state registrations

Free 14-day trial

Cancel anytime, no contracts

Services

Household Payroll Processing

Automated payroll processing for household employees including pay stub generation, direct deposit support, and PTO tracking.

Automated tax calculations Payroll tax filings Year-end W-2 and W-3 processing Schedule H preparation All 50 states covered EIN and state account registration

Nanny Tax Catch-Up Service

Back-tax filing service for households that paid employees informally without proper payroll compliance.

Federal and state back tax filings Voluntary disclosure support Catch-up fee structure Ongoing compliance included

Payroll Tax Compliance

Ensures household employers remain compliant with federal and state payroll tax requirements including FICA, FUTA, and state unemployment taxes.

Federal EIN registration State tax account setup Quarterly tax filings Annual reconciliation Deadline tracking

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Rating

★★☆☆☆

Reviews

Frequently Asked Questions

Do I have to pay taxes if I hire a nanny? +

Yes. If you pay a household employee $2,800 or more in 2025 ($3,000 in 2026), the IRS requires you to withhold and pay Social Security, Medicare (FICA), and federal/state unemployment taxes.

Is my nanny a W-2 or 1099 employee? +

Nearly always a W-2 employee. Because you control when, where, and how your nanny works, the IRS classifies them as a household employee, not an independent contractor.

What happens if I pay my nanny under the table? +

You risk IRS penalties including back taxes, interest, and fines that can exceed the original amount owed. If your nanny files for unemployment or gets injured on the job, you could face additional legal and financial liability.

What is Schedule H and do I need to file it? +

Schedule H (Form 1040) is the IRS form used to report household employment taxes. You must file it with your personal tax return if you paid a household employee above the annual wage threshold.

How much does a nanny payroll service cost? +

Nanny payroll services typically range from $39 to $75+ per month. Nest Payroll is $42/month with everything included — payroll processing, tax withholdings, quarterly filings, year-end W-2s, and Schedule H preparation.

How do I set up payroll for my nanny? +

With Nest Payroll, this entire process takes about 5 minutes — we handle the EIN, state registrations, and all filings for you.

Can I get in trouble for not filing nanny taxes in previous years? +

Yes, the IRS can assess back taxes, penalties, and interest for unfiled nanny taxes. However, voluntarily getting compliant before the IRS contacts you typically results in far lower penalties than being caught in an audit.

What tax forms do I need to give my nanny? +

Household employers typically need to provide a W-2 to their nanny at the end of the year, reporting total wages and taxes withheld. Nest Payroll automatically generates W-2s.