Do I need a nanny payroll service, or can I do it myself?
Updated November 6, 2026 · For 2026 · General information, not tax or legal advice
There are three ways to run nanny payroll. Which one fits depends on how much you want to hand off and how much you want to pay for it.
Full-service payroll companies
Services like HomePay, Poppins Payroll, SurePayroll and others charge roughly $45 to $80 a month, often with setup and year-end fees. They pay your nanny by direct deposit, pull taxes from your bank account, file the state quarterly reports and prepare the W-2 and Schedule H. You hand over your bank details and do nothing else.
Worth it if you never want to think about it, or if your state has unusual requirements and you would rather not learn them. The cost is $600 to $1,000 a year on top of the taxes themselves.
Spreadsheet and calculator
Free, and plenty of families do it. You look up the withholding tables, compute 7.65%, track the unemployment wage base, remember the deadlines and build your own stubs. The risk is not the arithmetic; it is the parts people forget: state income tax tables that change in January, the unemployment registration, the quarterly report, estimated payments, and overtime when a week runs long. A missed quarterly report in most states is a small penalty; a year of skipped overtime is a wage claim.
Software that does the math, you do the filing
The middle path. You log hours, the software computes the paycheck with every federal and state tax, prints the stub, and tells you what goes on each form and when. You pay your nanny the way you already do (Zelle, Venmo, check) and submit the state report and Schedule H yourself from pre-filled figures.
That is CareTab, at $14.99 a month. The filing calendar lists each due date for your state with the numbers ready to copy; reminders go out before each one. What it does not do is move money or submit forms on your behalf, which is also why it does not need your bank account.
Which to choose
- You want zero involvement and do not mind $50 or more a month: full service.
- You are comfortable submitting a short state form four times a year and your own 1040 once: software plus DIY filing.
- You have one part-time sitter under the threshold: nothing yet; just keep records.
Either way, start by seeing the actual numbers for your state in the calculator.
Frequently asked
What does a nanny payroll service actually do?
Computes paychecks, pays the nanny by direct deposit, remits your taxes to the IRS and state, files the quarterly state reports and year-end W-2 and Schedule H figures. You give them your bank account and they handle the rest.
How much time does doing it myself take?
Roughly 10 minutes a payday to log hours and pay your nanny, 20 minutes a quarter for the state report, and an hour in January for the W-2 and Schedule H figures, if software does the math.
Is CareTab a payroll service?
No. CareTab computes every paycheck and tax, produces stubs and pre-fills the state and federal figures, but you pay your nanny and file the forms yourself. That is why it costs $14.99 a month instead of $50 or more.
Pay your nanny legally for $14.99/month
Hours, paychecks with every federal and state tax computed, pay stubs, PTO, and a filing calendar with the figures pre-filled. 14-day free trial, no card needed.