All states · Updated for 2026
How to pay a nanny in Alabama
Everything a Alabama family has to do to pay a nanny, housekeeper or caregiver legally: the taxes, the registrations, the forms, and the deadlines. CareTab does the math and reminds you; you keep paying them the way you already do.
The short version
- Federal: withhold 7.65% Social Security and Medicare from their pay and match it; pay FUTA (0.6% of the first $7,000.00); file Schedule H with your 1040; give them a W-2 by Jan 31.
- Alabama unemployment tax: register with Alabama Department of Labor (Unemployment Compensation Division) after $1,000 or more in cash wages to domestic workers in a private household in any calendar quarter of the current or preceding year; new employers pay 2.70% on the first $8,000.00 of wages; file Quarterly Contribution and Wage Report (filed online via eGov) quarterly.
- Alabama income tax: withholding is voluntary for household employers (form A-4).
- New hire report: within 7 days of their start date.
- Minimum wage: $7.25/hour. Overtime: 1.5× over 40 h/week for live-out nannies.
- Paid sick leave: not mandated by the state.
- Workers' compensation: Not required for employers regularly employing fewer than five employees, and employers of domestic employees are not required to provide coverage (they may elect to) — per the Alabama Department of Labor Workers' Compensation Division.
Step by step
- Get an EIN from the IRS (free, online, 10 minutes).
- Have your nanny complete Form I-9 and, if they want federal income tax withheld, a W-4 and A-4.
- File the Alabama new-hire report within 7 days at the state site.
- Register with Alabama Department of Labor (Unemployment Compensation Division) once you cross $1,000 or more in cash wages to domestic workers in a private household in any calendar quarter of the current or preceding year (registration).
- Each payday: track hours, pay at least minimum wage and overtime, withhold 7.65%, give a pay stub.
- Each quarter: file Quarterly Contribution and Wage Report (filed online via eGov). Due the last day of the month following each quarter (Apr 30, Jul 31, Oct 31, Jan 31). Newly liable employers pay 2.70% on the first $8,000 of each employee's wages until experience-rated; register with Form SR-2 / eGov.
- January: W-2 to your nanny, W-2/W-3 to the SSA, A-3 (with W-2s) to the state. April: Schedule H with your 1040.
Run your numbers
Use the free Alabama nanny tax calculator: take-home pay, what you withhold, and your total cost including employer taxes.
Frequently asked
Do I have to pay nanny taxes in Alabama?
Yes. Once you pay a household employee $3,000.00 or more in a year you owe Social Security and Medicare (7.65% withheld from your nanny and 7.65% from you), and FUTA once you pay $1,000.00 in any quarter. Alabama unemployment tax applies after $1,000 or more in cash wages to domestic workers in a private household in any calendar quarter of the current or preceding year.
Do I withhold Alabama income tax from my nanny?
Alabama does not require household employers to withhold state income tax; you can withhold voluntarily using A-4 if your nanny asks.
What forms do I file in Alabama?
Quarterly Contribution and Wage Report (filed online via eGov) quarterly with Alabama Department of Labor (Unemployment Compensation Division), A-3 (with W-2s) annually, a W-2 for your nanny and W-3 to the SSA by Jan 31, and Schedule H with your federal return.
Does my nanny get overtime in Alabama?
Live-out nannies get 1.5× over 40 hours a week. Live-in nannies are exempt from overtime in Alabama. Alabama has no state minimum wage or overtime law; federal FLSA rules apply (live-in domestic workers exempt from overtime, not minimum wage).
What is the minimum wage for a nanny in Alabama?
$7.25 per hour in 2026.
Pay your Alabama nanny legally for $14.99/month
Hours, paychecks with every tax computed, pay stubs, PTO, and a filing calendar with Quarterly Contribution and Wage Report (filed online via eGov) pre-filled. 14-day free trial, no card needed.
Start free trialSources: Alabama DOR Withholding Tax Tables and Instructions for Employers and Withholding Agents (Revised January 2026) – Formula for Computing Alabama Withholding Tax; Alabama Department of Labor – Employer Information FAQ (UC liability, 2.70% new employer rate, $8,000 wage base, quarterly due dates); Alabama Department of Labor – New Hire Reporting Requirements; Alabama Department of Labor – Workers' Compensation Insurance Requirement Information. Rules for 2026 are provisional. General information, not tax or legal advice.