Nanny services help parents balance childcare and work. Often the hardest part is finding the right person for your family. However, adding a household employee puts you on the hook with the Internal Revenue Service (IRS).
Failure to file Schedule H (household employment taxes) and payroll taxes can result in large fines. Previous data published by the IRS found “only 5.3% of household employers file Schedule H” and adequately document the compliance with the nanny tax. This, along with several high-profile scandals, made the IRS clamp down on nanny tax compliance.
Fortunately, many nanny payroll services exist to automate some or all of the payroll process. To help you find the best solution, we reviewed 20 reputable companies in this field. We looked at the total overall cost, ease of use, and types of plans for each service. Furthermore, we identified the best companies for specific use cases, such as households with more than one employee or those needing benefit packages.
The 8 Best Nanny Payroll Services of 2021
Best Overall: SurePayroll
SurePayroll provides affordable payroll services, a mobile app, and you can pay your nanny with just a few clicks.
30-day free trial
No penalty tax guarantee
No contract required
No email customer service
Extra fees for accounting integrations
Additional expenses for Ohio and Pennsylvania residents
SurePayroll began as a service for small businesses but quickly updated its offerings to include a cloud-based nanny payroll solution. With SurePayroll’s easy-to-use mobile applications and tax filing guarantee, it’s the best overall solution for parents.
You’ll pay a monthly fee of $49.99 to use SurePayroll services for one household employee and can add additional staff for $10 per person. However, you may pay extra costs, such as:
- $9.99 per month to calculate and file payroll taxes in two or more states
- $9.99 per month to calculate and file local taxes in Ohio and Pennsylvania
- $4.99 per month to integrate payroll services with your accounting software
- $4.99 per month plus $3 per employee per month for time clock integration
The nanny and household staff plan lets you use a browser or an iOS and Android-compatible mobile device to oversee payments. With your monthly payment, you get:
- Two-day payroll processing
- AutoPayroll option for salaried employees
- SurePayroll completes your state-required new-hire reporting
- Receive a Schedule H for your yearly taxes
- Automatically files your quarterly 1040-ES
- Calculates, pays, and files Social Security, Medicare, unemployment, and state taxes
- Offers direct deposit and online pay stubs
- Mobile apps for you and employees
For an extra fee, you can integrate your payroll services with your household accounting program such as Sage 50-US, Intuit QuickBooks Online, Less Accounting, Intacct, Xero, and AccountEdge. Although the company doesn’t provide email customer service, their phone support is available Monday through Friday from 7 a.m. to 8 p.m. and Saturday from 9 a.m. to 1 p.m. CST.
Best Customer Service: HomeWork Solutions
HomeWork Solutions delivers concierge-quality services for dedicated help when you need it.
No penalty tax guarantee
Works in all 50 states
Unlimited telephone consultations
More expensive than other solutions
Requires a setup fee
No mobile apps
Established in 1993, HomeWork Solutions is a well-known household payroll and nanny tax compliance service. Its comprehensive software and responsive customer service teams support parents throughout the process, making it the clear winner for our best customer service category.
HomeWork Solutions provides two robust plans for payroll services for one employee. Both programs offer services such as:
- Calculate, pay, and file tax withholding amounts
- Prepare payroll tax returns
- Generates form 1040 Schedule H and W-2
If you pay your employee yourself, then the Essential Payroll plan handles everything else. However, if you want HomeWork Solutions to mail a check or use direct deposit, opt for the Complete Payroll plan. Pricing packages include:
- Essential Payroll: $150 per quarter for tax filing, form generation, and unlimited support
- Complete Payroll: $225 per quarter with weekly nanny payments or $200 per quarter with bi-weekly nanny payments for a dedicated payroll representative and cloud storage for payroll records
You will pay one-time fees of $100 for initial setup and a year-end fee of $100. If you add more than one employee, it’s an extra $60 per employee per quarter. Along with a comprehensive knowledge base, HomeWork Solutions offers telephone support Monday through Friday from 7:30 a.m. to 6 p.m. CST.
Best Free Option: Payroll4Free.com
For parents on a tight budget, Payroll4Free.com calculates your household employee tax payments for free.
Zero cost to process payroll and direct deposit checks
Low fee for full-service features
Integrates with accounting programs
Only works on Windows operating systems
Must pay for payroll tax deposits and filing
As a Better Business Bureau-accredited business, Payroll4Free.com handles your tax documents and calculations for free. The company keeps the service free by including advertisements in the software, making it the best free option for household employers.
If you want the company to file paperwork for your taxes or make payroll tax deposits, then it’s $15 per month. Otherwise, you get these features at no cost:
- Vacation, sick time, and paid time off (PTO) tracking
- Reports for earnings, taxes, and benefits
- Employee portal to access paystubs and W-2 forms
- Payroll processing for direct deposits or paper checks
- Calculates and fills out your federal, state, and local forms
- Unlimited live customer service
- Ability to set up 401(k) deductions and contributions
- Integrates with Intuit QuickBooks and other accounting programs
- Can print checks from the software
Although Payroll4Free.com doesn’t provide many online resources, you can call or email the company for U.S.-based support.
Best for Multiple Employees: Savvy Nanny
Savvy Nanny is the most affordable option for households with multiple employees.
No contract required
Available in all 50 states
Can’t process city or county taxes in some locations
The service doesn’t help you apply for an EIN
Savvy Nanny provides the features you need to handle one or more household staff without breaking your budget, making it the best choice for families with multiple employees.
With Savvy Nanny, you’ll pay one flat-rate fee of $40 per month for one to two employees and a $50 year-end filing fee. You can add extra household staff for $6 per employee per month plus $5 annually as a year-end filing fee. The company is very transparent and lists all possible expenses in a pop-up form. The extra fees all stem from possible errors like non-sufficient funds or re-running payrolls.
This all-in-one service comes with features like:
- Files and pays all state and federal taxes once you click submit
- Options for direct deposit or paper checks
- Can email pay stubs to employees
- Can automate payroll or set up reminders
- Real-time reports are exportable to Microsoft Excel
- Integrates with QuickBooks
- Automatically prepares year-end W-2s for printing
Savvy Nanny offers support via email, chat, and phone weekdays from 7 a.m. to 8 p.m. CST plus Saturday hours from 9 a.m. to 1 p.m.
Most Comprehensive Option: NannyChex
NannyChex handles every aspect of your payroll, including PTO or sick time tracking.
No contract required
Works in all 50 states and handles all local taxes
Unlimited free assistance
No mobile app
Extra fees for payroll processing
Expensive year-end fees
Built specifically for paying household employees, NannyChex is an all-in-one solution. Get free support for each step of payroll, then automate it, so you don’t have to worry about quarterly or year-end tax compliance. This payroll service delivers everything you need making it the most comprehensive option at an affordable price.
NannyChex offers taxes-only or full-service plans, which is great if you want to pay your employee yourself via check but don’t want to deal with taxes. Both packages provide:
- Free registration and setup
- Dedicated personal account representative
- The company sets up your EIN
- Prepares and submits new hire reports
- Files and deposits tax payments
- Maintains all records
- Sick time, PTO, and vacation tracking
- Handles all tax correspondence
- Manages worker compensation audits, employment verification, and unemployment insurance claims
You don’t need to worry about hidden fees with NannyChex. Choose from two plans with simple pricing structures and no contracts:
- Taxes Only: Pay $125 per quarter and $195 for year-end tax preparation
- Full Service: Pay $80 per quarter, $150 year-end tax fee, and $6.25 payroll processing per weekly check or $12.50 per bi-weekly, semi-monthly, or monthly paychecks
Send an email or call the toll-free customer support number for assistance with the software or payroll tax questions.
Best for Offering Benefits: GTM Payroll Services
As a licensed broker for insurance and benefits, GTM Payroll Services handles your payroll and benefits with ease.
Huge range of benefit options
Responsive customer service
No tax penalty guarantee
A six-month contract is required
$95 setup fee
More expensive than other services
Finding and retaining household help isn’t easy. But providing benefits like a 401(k) plan or maintaining compliance with your state’s worker compensation insurance helps you secure and keep a nanny. GTM Payroll Services is also a licensed broker offering a vast range of benefits in 28 states and Washington, D.C., making it the best payroll company for offering staff benefits.
GTM Payroll Services offers one comprehensive plan for $65 a month. You’ll also pay a $95 setup fee and $100 for year-end tax preparation. If you have more than one employee, it’s an extra $20 per month per employee. The payroll plan includes:
- Payroll tax calculation, filing, and payment
- Optional year-end tax preparation
- Unlimited support calls, emails, and live chat
- Free direct deposit
- Web-based or mobile app
- Self-service employee portal for paystubs and W-2 access
- Automated payroll services
As a licensed broker, the company offers custom quotes for a huge range of employee services such as:
- Travel insurance
- Worker compensation insurance
- Individual coverage HRA (ICHRA)
- Medical, vision, dental, and virtual health benefits
- Employee background checks
- Health reimbursement arrangement (HRA)
- Retirement plan options
- Flexible spending account (FSA)
- Small employer HRA (QSEHRA)
- Employee dishonesty insurance
Along with tons of online resources, you can email or chat online with customer support. The company also offers free calls with their team by appointment.
Most Convenient Option: Simple Nanny
Save time with accurate calculations and a hassle-free user interface.
Free 30-day trial with no credit card needed
Easy-to-use calculator tool
Minimal customer service
No automatic reminders
Not for people wanting comprehensive services
Simple Nanny is a DIY payroll calculator. It only takes a few seconds to enter your nanny’s hours for each paycheck period. Its ease of use and barebones format is why Simple Nanny wins for the most convenient nanny payroll software.
Many people pay their nanny cash or by personal check, so end-to-end payroll services aren’t necessary. However, keeping track of changing tax rates and 12 months of data is difficult when using a spreadsheet. Instead, Simple Nanny handles the calculations for you.
For $29 per year, the software offers a minimal dashboard that lists your household employees and paycheck information. You can click by employee or pay period to review information about taxes or hours. When it’s time to pay quarterly or annual taxes, it’s easy to access your records and complete the filing information on state and federal websites.
Due to its simplicity, Simple Nanny doesn’t offer an extensive knowledge base or customer support by phone. You can email the company with any questions.
Best for Seasonal Use: Payroll by Wave
With Payroll by Wave you only pay for activated employees, making it perfect for keeping track of seasonal staff.
Free 30-day trial
100% guaranteed accuracy
Full-service only available in 14 states
No mobile application
No third-party integrations
Wave Payroll makes it easy to track pay periods, taxes, and nanny information, even when your staff only works part of the year. Instead of re-entering data each time a nanny rejoins your household, you can find their name and reactivate your employee. Although Wave Payroll is excellent for year-round use, its offboarding capabilities differentiate it from other software, making it the best choice for households with seasonal staff.
Wave Payroll provides tax filing services for people living in 14 states. Household employers in other states have access to Wave Payroll’s self-service option, where you file and pay your taxes using data from the Wave application. The plan prices are:
- Full-service payroll: $35 per month, plus $6 per active employee
- Self-service payroll: $20 per month plus $6 per active employee
This nanny payroll service provides everything you need to activate or deactivate your seasonal employees. Click on the employee’s name and you can change the status by placing your employee on leave or removing them. You can also see their employment history with dates, tax details, or employee records. Other software features include:
- One-click direct deposit
- Expense reports show payroll data by employee or date
- Employee portal for paystubs and tax forms
- Full-service plans automatically file and send tax payments
- Quickly generate end-of-year tax forms
- Timesheet tool to track hours
- Integration with free Wave accounting software
- PTO and worker compensation insurance tracking
- To-do list on your dashboard to easily see upcoming payroll tasks
Wave Payroll offers live chat Monday through Friday and email support for your customer service needs.
What Is a Nanny Payroll Service?
Nanny payroll services help you track your household employee payments, correctly calculate taxes, and stay compliant with tax rules. DIY or self-service options perform the tax calculations for quarterly or end-of-year taxes, but you file the documents with your local, state, and federal governments.
Full-service plans calculate, file, and make your tax payments to the government on your behalf. Many full-service programs offer guarantees, so if your tax payment is incorrect, the payroll provider deals with the Internal Revenue Service and pays any associated fees.
Nanny payroll solutions may also help you track worker compensation, offer benefits, or direct deposit your staff’s paychecks. Its purpose is to make it easy for you to oversee your household employee’s pay and stay compliant with tax regulations.
Who Should Use Nanny Payroll Services?
Anyone who wants to save time will benefit from nanny payroll services. Calculating the various taxes is tedious, and it’s easy to make errors or miss changes in tax law. You don’t need any special accounting or payroll skills to use payroll software, making it perfect for households looking to automate payroll and save time during tax season.
What Does a Nanny Payroll Service Cost?
Nanny payroll solutions offer various plans that consist of full service or self-service options. For fully automated services where the company handles your tax payments and direct deposit checks, you’ll pay $15 to $65 per month.
For self-service plans where you file and pay your taxes yourself, you’ll find free options like Payroll4Free.com or plans ranging from $2.50 to $37.50 per month. However, you may incur several other fees, including:
- Setup fee: Some providers charge a fee to set up your services, and it usually costs around $100.
- Extra employees: For more than one employee, you’ll pay an additional $6 to $20 a month per worker.
- Year-end fee: Annual tax form completion costs $0 to $195 as a one-time fee at the end of the year.
- Check processing fee: Some companies, like NannyChex, charge a fee to process your payroll. Costs are $6.25 weekly or $12.50 for other types of payroll periods.
Do I Need an EIN to Pay a Nanny?
You do need an employer identification number (EIN) to pay your nanny. An EIN is a nine-digit number that the IRS issues to anyone who employs people in a personal or business setting. You need your EIN for use on all tax forms, including your nanny’s W-2 form.
Some payroll services like NannyChex set up your EIN for you. Otherwise, you can apply for an EIN online and receive your number immediately. Or apply by submitting Form SS-4 via mail or fax, and you’ll receive your EIN by mail or fax.
How We Chose the Best Nanny Payroll Services
We looked at the various plan pricing and fees to select the best nanny payroll services, as these differ significantly among providers. Then we reviewed features of self-service and full-service plans, including unique offerings like assistance with new-hire paperwork or signing up for an EIN. Lastly, we evaluated providers based on features useful to families and employees, like mobile applications, PTO tracking, and annual tax form documents.