Can I pay my nanny a salary instead of hourly?
Updated November 6, 2026 · For 2026 · General information, not tax or legal advice
Yes, with one condition: a salary never removes the hourly rules. Nannies are non-exempt under the Fair Labor Standards Act, so even on a salary you must track hours, pay overtime after 40 hours (live-out), and make sure the salary works out to at least minimum wage.
Build the salary from hours
Start from the schedule, not a round number:
- Agree the regular weekly hours, say 45.
- Pick a base hourly rate, say $25.
- Salary = 40 × $25 + 5 × $37.50 = $1,187.50 a week, or $61,750 a year.
Put all three numbers in the work agreement. If the nanny works 48 hours one week, the extra 3 hours are paid at $37.50. If they work 42, you still pay the full salary because those are guaranteed hours.
The mistake to avoid
Setting "$1,000 a week for whatever hours we need" is the arrangement that produces wage claims. If the nanny averages 50 hours, the implied rate is $20 straight time with no overtime premium, and a state labor department will compute back pay at 1.5× for every hour over 40, going back two or three years. Some states add liquidated damages that double it.
Daily rates
A day rate works the same way. Agree the hours a day covers (8, 10, 12), and pay hourly beyond that, with overtime after 40 hours in the week or after the daily threshold in states like California that have one.
Taxes do not change
Salary, hourly or daily, the wages are subject to the same withholding, the same unemployment tax and the same W-2. Pay stubs should still show hours; several states require it.
CareTab supports hourly, salary and per-day pay with guaranteed hours and the overtime rules for your state, and flags any week the salary falls below the legal floor. See the paycheck for each option in the calculator.
Frequently asked
Is a nanny exempt from overtime if salaried?
No. The salaried "exempt" rules cover executives, professionals and administrators. Domestic workers are non-exempt regardless of how they are paid.
How do I set a salary that covers overtime?
Agree on the hours, then set the salary as 40 hours at the base rate plus any hours over 40 at 1.5 times. Write both the hours and the implied hourly rate into the contract.
What if the nanny works fewer hours one week?
With guaranteed hours you pay the full salary. If the nanny works more than the agreed hours, you owe the extra at the overtime rate.
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