Hiring a nanny 'on the books' isn't complicated — it's just a sequence of small steps most families have never done before. Do them in order and you'll have a clean, compliant setup in an afternoon or two. Here's the whole checklist.

Before their first day

  • Get an EIN. Your free federal employer number, applied for online at IRS.gov in about 15 minutes.
  • Register with your state. Set up a state unemployment (SUTA) account, and a withholding account if your state has income tax.
  • Agree on the terms. Nail down the pay rate, schedule, guaranteed hours, overtime, PTO, and start date — ideally in a written offer.
Agree on a GROSS wage (before taxes), not 'take-home.' If you agree on net pay, you're on the hook for whatever taxes it grosses up to — an expensive surprise. See our guide on gross vs. net pay.

On day one

  • Form I-9. Verify your nanny is authorized to work in the U.S. They complete Section 1 on or before day one; you complete Section 2 within three business days after reviewing their ID documents. You keep the I-9 — you don't file it.
  • Form W-4. Your nanny fills this out so you know how much federal income tax to withhold. Some states have their own version too.
  • Sign the contract. A written work agreement covering pay, hours, duties, time off, and how either side can end the arrangement.
Income-tax withholding is technically optional for household employers — but most families do it so their nanny isn't hit with a big bill at tax time. The W-4 is what makes that possible.

Set up how you'll pay and track

  • Pick a pay schedule — weekly, biweekly, or semimonthly — and stick to it.
  • Choose how the money moves — Zelle, direct deposit, PayPal, check, or cash. (This is just the payment; a payroll tool like House handles the math and records, not the money.)
  • Decide how you'll track hours so overtime and guaranteed hours are accurate.
  • Set up pay stubs — every pay period, showing gross pay, each tax withheld, and net pay.

Protect yourself: insurance

Many states require workers' compensation insurance once a household employee works a certain number of hours — and even where it's optional, it protects you if your nanny is hurt on the job. Check your state's rule, and consider whether your homeowner's or renter's policy needs a rider.

Across the year (payroll rhythm)

  • Each pay period: calculate gross, withhold FICA and income tax, pay net, and issue a pay stub.
  • Each quarter: set aside (or pay) your household employment taxes so they don't pile up — often via Form 1040-ES.
  • Each state's schedule: file and pay SUTA (usually quarterly).

At year-end

  • Form W-2 to your nanny (and copy A + W-3 to the Social Security Administration) by January 31.
  • Schedule H attached to your personal Form 1040 to reconcile the year's household employment taxes.
Rules and deadlines vary by state and change over time. This checklist is a starting map, not tax or legal advice — confirm specifics for your state.

House walks a new hire through W-4 and I-9, builds your contract, runs the payroll math, and generates the W-2 and Schedule H figures — free.

Start the setup

The bottom line

Hire legally by working the list top to bottom: EIN and state accounts, I-9 and W-4 on day one, a signed contract, a steady pay rhythm with real pay stubs, the right insurance, and W-2 plus Schedule H at year-end. None of it is hard — it just has to be done in order.