4 Best Nanny Payroll Services 2023
Charlette has over 10 years of experience in accounting and finance and 2 years of partnering with HR leaders on freelance projects. She uses this extensive experience to answer your questions about payroll.
Juvy has over 10 years of content writing experience and was a licensed teacher. She has evaluated and written about dozens of payroll and HR software solutions for small business to provide the best answers to your software questions.
This article is part of a larger series on Payroll Services.
A solid nanny payroll software is important for families that don’t want to process payroll on their own. The best nanny payroll service ensures that you are tax compliant on federal, state, and local levels. Its features are also specifically structured for household employees, such as preparing Schedule H for household employment taxes and other tax forms. Some solutions even offer a self-service portal where your household staff can view payslips and tax information.
We evaluated 18 nanny payroll solutions, from full-service payroll providers with tax filing services to do-it-yourself (DIY) programs, and picked the four best nanny payroll services that offer the specific features needed for paying domestic workers.
- SurePayroll: Best overall nanny payroll service
- Paychex: Best full-service nanny payroll with comprehensive benefits
- HomeWork Solutions: Best nanny payroll tax support, including back taxes
- HomePay: Best compliance and customer support for household employers
Top Nanny Payroll Services Compared
All the nanny payroll software on our list provide automatic pay runs, new hire reporting, online payslips, direct deposit payments, Schedule H forms, and tax filing services, although tax filings cost extra. These providers also offer access to basic benefits, but mostly through partner insurance companies. Below are some of the standout features.
Free Trial | Pricing (one employee) | Nanny Payroll Services | |
|---|---|---|---|
 | One month for household employers Two months for small businesses | $49.99 per month $9.99 monthly for local tax filings in Ohio and Pennsylvania |
|
 | ✕ | $35 per month* Some tax services cost extra; call for quote |
|
 | ✕ | $220 or $245 per quarter for biweekly or weekly payroll $110 for year-end tax prep Setup fee of $110 |
|
 | ✕ | $75 per month $100 for year-end tax prep |
|
*Pricing is based on a quote we received.
Best Nanny Payroll Service Quiz
Which Nanny Payroll Service is Right For You?
SurePayroll: Best Overall Nanny Payroll Service
Overall Score:
4.23 / 5
Pros
- Unlimited and automatic pay runs
- Files your 1040-ES and provides a signature-ready Schedule H form
- Tracks PTO and sick leaves
- Two-day direct deposits
Cons
- No free state registration or federal tax ID setup for new household employers
- Local tax payments and filings in Ohio and Pennsylvania cost extra
SurePayroll Pricing
- $49.99 monthly for one household employee
- $10 monthly for each additional household employee
- One-month free trial
Add-ons
- Time clock integration: $4.99 plus $3 per employee monthly
- Accounting software integration: Starts at $4.99 monthly
- Ohio and Pennsylvania local tax filings: $9.99 monthly
SurePayroll offers a cloud-based payroll software that can handle the pay processing needs of small businesses, including household employers. It has all the features you need to manage nanny payroll—from direct deposit payments to unlimited pay runs and payroll tax filings. Take note that those in Ohio and Pennsylvania have an additional charge for local tax filing. However, if you’re a new household employer, SurePayroll doesn’t take care of your federal tax ID setup like the other four nanny payroll services on our list.
It earned 4.23 out of 5 on our evaluation because it offers the strongest set of payroll and tax filing features at the best price—around $600 per year for one household employee. This is significantly lower than the cost of similar nanny payroll services like HomeWork Solutions and HomePay. Users who left feedback on third-party review sites like G2 and Capterra like the platform’s straightforward navigation. SurePayroll would have earned a higher score if not for its lack of dedicated support, employer ID setup assistance, and onboarding tools.
With SurePayroll, you can process and approve payments for your household employees with just a few clicks. (Source: SurePayroll)
SurePayroll Features
While SurePayroll doesn’t help get your federal employer identification number (EIN), it efficiently handles the rest of your payroll needs. It calculates nanny pay with withholdings and benefits and pays household employees via direct deposits. If you hire a new nanny, it handles state new hire reporting for you. It also offers compliance resources and guides to help you stay on the right side of the law.
Like Paychex and HomeWork Solutions, SurePayroll offers access to employee benefits plans you can provide to your staff. It also supports deductions for Medicare, Social Security, and unemployment state insurance in all 50 states.
Unlike HomePay, which only automates federal and state payroll taxes, SurePayroll automatically withholds, pays, and files taxes on the federal, state, and local levels (those in Ohio and Pennsylvania will have to pay an additional fee for local filing). Best of all, it offers quarterly and year-end tax filings for free while keeping you tax-compliant. You have to pay extra for some of these services if you get Paychex, HomePay, HomeWork Solutions, or NannyChex.
It works seamlessly with QuickBooks Online, Xero, Intacct, AccountEdge, Less Accounting, Zoho Books, and Sage 50-US Edition.
Among all the providers shortlisted, only SurePayroll has Spanish-speaking support (in addition to English) available through chat and phone Monday to Friday from 7 a.m. to 8 p.m. and Saturday from 9 a.m. to 1 p.m. Central time.
Paychex: Best Full-service Nanny Payroll With Comprehensive Benefits
Overall Score:
4.08 / 5
Pros
- Reasonably priced
- Dedicated payroll specialist
- Online and mobile payroll processing
- Benefits options include health plans, 401(k) plans, and workers’ comp
Cons
- Pricing isn’t all transparent
- You need to pay for year-end tax report prep and online delivery (W-2s and Schedule H)
- Employee benefits cost extra
Paychex Pricing
- $35 per month for one household employee*
- Benefits plans and payroll tax filing services have additional fees; call for a quote
*Pricing is based on a quote we received.
Paychex is one of our top payroll services for small businesses. It offers several features, such as payroll and human resources (HR) tools, dedicated payroll specialists, and employment and income verification services. Its Paychex Flex solution is readily accessible online or through mobile apps for iOS and Android devices to ensure fast and efficient payroll delivery. Moreover, Paychex offers new hire reporting, accounting and HR productivity tools, benefits (retirement and health plans) management, and time tracking integrations to help you do more for your household employees.
The system earned an overall rating of 4.08 out of 5 in our evaluation, with perfect marks in user popularity and high scores in nearly all of our criteria. It would have taken the first spot on our list of best nanny payroll software if all of its pricing details were readily available and if it didn’t charge for year-end tax filing services, unlike SurePayroll. However, users still praised its intuitive platform and efficient payroll tools.
Paychex Flex lets you easily update employee payment options—from direct deposits to check payments and vice versa. (Source: Paychex)
Paychex Features
With two clicks, you can run payroll using a desktop computer or mobile device. It lets you pay employees via direct deposits and live checks—it even offers check-signing services. Multiple pay schedules are also supported by Paychex, just like HomeWork Solutions, NannyChex, and HomePay, but these providers’ pay schedule options are a bit limited compared to Paychex.
Similar to the other nanny payroll services we reviewed (except SurePayroll), Paychex will help you set up your tax accounts if you’re a new household employer. It also files taxes in all 50 states and for local areas, although Paychex charges for some of its payroll tax services.
Here is where Paychex stands out. While it does tasks that some of the nanny payroll service providers on our list do, such as new hire reporting and PTO tracking, it goes beyond that. You can offer health plans and other benefits for your employees, purchase workers’ compensation insurance, and integrate time tracking into its platform. These, of course, cost extra, but if you have multiple full-time household employees, it may be your best choice.
Like SurePayroll, Paychex has free mobile apps for both iOS and Android devices that your household employees can use to access payslips and update their personal information. The other nanny payroll services in this guide don’t offer such an app, although HomePay has a mobile time tracker solution.
Paychex has a team of compliance experts and payroll specialists that can provide knowledgeable advice on tax and labor regulations. HomePay and NannyChex also offer consultation services in their plans. However, Paychex―like HomeWork Solutions and NannyChex―gives you a dedicated representative and has 24/7 customer and technical support via phone and chat.
HomeWork Solutions: Best for Employers Looking for Solid Nanny Tax Support
Overall Score:
3.96 / 5
Pros
- Complete nanny payroll service and a tax filing-only plan
- Federal ID and tax account setup services for new household employers
- Back taxes assistance
- Dedicated payroll specialist
- Payment options include direct deposits, live checks mailed to household staff, and direct payments from employer to employee
Cons
- One-time setup fees
- New account setup takes five to seven days
- Year-end tax preparation and back taxes management cost extra
HomeWork Solutions Pricing
Complete Payroll:
- $220 per quarter for one employee’s biweekly payroll
- $245 per quarter for one employee’s weekly payroll
- $65 per quarter for each additional employee
Essential Payroll (tax prep and filing services only): $165 per quarter
Setup fee: $110
Add-ons
- Year-end tax form prep: $110 per employee
- “Back taxes” assistance for previous quarter: $225
HomeWork Solutions is an all-in-one payroll and tax compliance software. It has flexible plans that include full-service payroll and a tax filing option to help household employers only needing tax assistance. SurePayroll offers a similar tax filing-only service, but HomeWork Solutions stands out with back taxes support. Apart from pay processing and tax filings, it provides a dedicated payroll representative and offers federal ID and tax account setup for new household employers. If you need help with back taxes, HomeWork Solutions can calculate the previous quarter’s nanny payroll taxes for an add-on fee of $225.
It supports employee payments through direct deposits and live checks mailed to your staff. It even allows you to pay your employee directly—a payment setup that none of the providers in this guide offer.
With 3.96 out of 5 in our evaluation, HomeWork Solutions scored high (4 and up) in payroll functionalities and our expert assessment of whether it is a good nanny payroll service option. While it has very few reviews online, users commended HomeWork Solutions for its reliability and responsiveness when there are issues. Its setup and year-end tax prep fees, as well as its lack of onboarding tools, in-house workers’ compensation plan, and benefits options, prevented it from ranking higher.
HomeWork Solutions has an online registration wizard to help new users set up their online accounts. (Source: HomeWork Solutions)
HomeWork Solutions Features
HomeWork Solutions has both a do-it-yourself (Essential) plan and full-service (Complete) payroll package. The Essential plan provides you the option to outsource payroll tax calculation and form preparation, including tax payments and filings, and simply handle nanny salary payouts yourself. Meanwhile, its Complete payroll package lets you choose between weekly and biweekly pay runs and includes payroll and tax calculations and tax payment and filing services.
Like SurePayroll and Paychex, HomeWork Solutions offers automatic payroll tools. If you prefer to handle payments yourself, it can send you the calculated net payroll (less taxes and other deductions) so that you can pay your nanny directly. It can also pay your household staff via direct deposits and checks mailed to the employee. While Paychex has live check printing capabilities and offers check signing services, it doesn’t mail checks like HomeWork Solutions does.
HomeWork Solutions handles new household employer account setup with the IRS and relevant state tax authorities. HomePay and NannyChex also offer the same service, while Paychex walks you through the process (SurePayroll doesn’t do this). Apart from completing all quarterly employment tax forms, filings, and remittances, HomeWork Solutions automatically files and pays employment taxes at all levels (federal, state, and local)—unlike HomePay, which does not handle local taxes. And for $225, HomeWork Solutions can calculate back taxes for the previous quarter—a service that none of the providers on our list offer.
HomeWork Solutions ensures employer compliance with state-specific new hire reporting rules. Similar to Paychex, it can connect you with insurance partners to assist with workers’ compensation requirements. Both HomePay and SurePayroll also offer workers’ compensation insurance and other benefits, although with extra costs, while NannyChex does not provide this service.
Similar to Paychex, HomeWork Solutions has a dedicated payroll representative who can come to your aid whenever you need it. It also provides unlimited “concierge” support that you can reach either online, by email, or by phone from Mondays through Fridays, 8 a.m. to 7 p.m., Eastern time.
HomePay: Best for Employers Needing Compliance & Customer Support
Overall Score:
3.69 / 5
Pros
- Sets up federal and state tax accounts for new household employers
- Tracks PTO accruals and other reimbursements
- Unlimited chat, email, and phone support with audit assistance, if needed
- Experts on staff for advising on compliance issues
- Access to Care.com’s network of caregivers and household staff
- Offers a “happiness” guarantee: New clients unhappy with HomePay’s services within the first six months can ask for a refund
Cons
- Doesn’t prepare, file, and remit local taxes
- Year-end tax preparation costs extra
- Lacks access to employee health insurance plans
HomePay Pricing:
- $75 per month for one household employee, billed quarterly
- $100 for year-end tax preparation
HomePay by Care.com is the most expensive option on our list of best nanny payroll services. It manages the entire process, from setting up your employee in its system to processing payroll and managing taxes. It has a self-service portal for your employee and gives you lifetime access to pay stubs and other payroll records—none of the other nanny payroll services we reviewed do that (except Paychex).
HomePay also offers a few HR services, like tracking PTO accruals and reimbursements. Its connection with Care.com enables you to access online tools to find and hire caregivers, nannies, and other household workers. You can also rely on it for unlimited support, plus it has a team of HR and payroll experts if you have questions about compliance and other household employee payroll issues.
The solution scored 3.69 out of 5 in our evaluation, with ratings of 4 and up in HR features, ease of use, and our expert review. It would have gotten a higher score in payroll functionalities if it offered payroll tax services for all levels. With HomePay, only federal and state taxes are filed, and you need to pay for year-end tax preparation, unlike SurePayroll, which doesn’t charge extra for this. It also scored the lowest in popularity because it doesn’t have user reviews on popular review sites like G2 and Capterra as of this writing.
HomePay offers a mobile-friendly payroll solution so you can easily set up automatic payments, adjust your nanny’s pay rate, and more. (Source: HomePay)
HomePay Features
HomePay will only require your nanny’s email address to set up an online profile in its system. The provider will even collect the household employee’s personal information, W-4 withholding elections, and bank account information for you. Aside from HomePay, only Paychex offers this level of onboarding support.
HomePay calculates and facilitates employee payments automatically through direct deposit or manual paycheck. If you want to monitor your household staff’s attendance, HomePay has a mobile time-tracker app. The other nanny payroll service providers we reviewed lack time tracker apps (except Paychex, but it costs extra), although SurePayroll can integrate with time clock software.
It will also calculate and withhold applicable taxes or payments that need to be made for each pay period. However, unlike the other nanny payroll services on our list, HomePay handles federal and state taxes only.
Aside from new hire reporting, HomePay tracks PTO accruals and reimbursements. HomePay will also maintain general nanny information and payroll record-keeping for you.
HomePay’s self-service portal allows your household staff to view their payroll records and pay stubs online. You are also granted lifetime access to payroll and tax records.
Similar to the other providers in this guide, HomePay offers a service accuracy guarantee where it will handle any incurred tax penalties for mistakes its representatives make. On top of that, its “happiness” guarantee reimburses clients who are unsatisfied with HomePay’s quality of service within their first six months. None of the other providers on our list offer this.
HomePay’s connection with Care.com enables you to access its network of caregivers, tutors, nannies, and other household staff. It also provides online tools to help you find and hire household employees.
With HomePay, you can reach its customer support via phone, chat, or email on weekdays.
Alternative Nanny Payroll Services
Our goal is to share the best nanny payroll services, and certain criteria must be met to make our list. However, two products impressed us enough to be listed as the best alternatives: Poppins Payroll and NannyPay. Both are affordably priced, but the services are either limited to a handful of states or only offer payroll calculation tools.
For $45 monthly, Poppins Payroll handles new employer registration, PTO and sick leave tracking, payroll and tax calculations, and tax filings for you. However, its services are limited to the following (as of this writing): Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Oregon, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, and Washington, D.C.
Meanwhile, NannyPay, is readily available to anyone, but it is software that allows you to run nanny payroll yourself. For an annual fee of $199.95, you can process payments for up to three household employees. While its system handles payroll and tax calculations with ease, NannyPay doesn’t offer tax filing services and new employer setup support. However, it’s a good option for those who prefer to handle pay and tax processing themselves.
Do you need help deciding what type of payroll solution fits your requirements? Read our guide on finding the best payroll software to determine the best online payroll service for you.
How We Chose the Best Nanny Payroll Service
To find the best nanny payroll service, we compared 18 nanny payroll services against features we believe are most important for those hiring household employees. Aside from pricing, we looked at pay and tax processing functionalities specific to nanny payroll. We also considered ease of use and customer support since household employers don’t usually have much experience with processing payroll.
Click through the tabs below for our full evaluation criteria.
30%
Payroll features
20%
Pricing
20%
Ease of use
15%
Expert review
10%
HR features
5%
Popularity
30% of Overall Score
We gave priority to those that offer unlimited payroll runs, direct deposit payments with an option to process paper checks, and tax payment and filing services, including year-end tax form submissions (W-2 and Schedule H). SurePayroll earned the highest score in this criterion because it offers solid payroll tools, and you don’t have to pay for tax filing services, while the other providers on our list charge extra for it.
20% of Overall Score
We looked at the monthly costs and setup fees, including whether pricing details are readily available on the provider’s website. Preference was given to those that charge less than $50 monthly for one employee and don’t have setup fees. Paychex received the highest mark here.
20% of Overall Score
Payroll service and software should be easy to access and set up and have a user-friendly interface. We gave points to those that provide a dedicated representative, employer ID and tax set-up assistance, and live phone support that resolves issues promptly. Paychex earned the highest rating (4.75 out of 5), followed by NannyChex (4.5), SurePayroll (4.25), and HomePay (4). HomeWork Solutions came in last (3.88), mainly because you have to sign up for its higher tier to get a dedicated rep.
15% of Overall Score
This criterion reflects how well we think the software works for families in particular as far as price, tax prep, and ease of use. We gave HomeWork Solutions perfect marks here.
10% of Overall Score
We favor providers that handle onboarding and include a self-service portal that nannies can use to see payments made, edit information, and/or print forms. It is also better if the provider has workers’ comp and other employee benefits options and access to experts who will advise users on compliance issues. Both HomePay and Paychex earned the highest scores (4 and up) in this criterion.
5% of Overall Score
We considered online user reviews from third-party sites (like G2 and Capterra) based on a 5-star scale, wherein any option with an average of 4+ stars is ideal. Also, software with 1,000 or more reviews on third-party sites is preferred. Paychex earned perfect marks, with SurePayroll and HomeWork Solutions tied at second (both scoring 3.75). HomePay and NannyChex didn’t receive points here because they don’t have user reviews on G2 and Capterra.
*Percentages of overall score
Nanny Payroll Frequently Asked Questions (FAQs)
Paying your nanny (or other household employees) is different from paying a casual babysitter or neighborhood kid to do your lawn. There are laws around having a domestic worker on your payroll—particularly if you pay them more than $2,400 in wages in a calendar year.
It’s important that you get nanny payroll correct. Partnering with a provider that offers nanny payroll services/software can help you navigate the intricacies of managing payments for household employees. Aside from ensuring that you remain compliant with federal and state laws, these providers have the essential tools to calculate wages and deductions accurately and prepare the required tax forms for filing to the IRS.
Do you want to learn more about paying nanny taxes? Our guide to nanny taxes has all the information you need to know about calculating and paying nanny taxes, including the tax forms that household employers need to submit.
No, nannies cannot be considered independent contractors because the amount of control over their work hours and environment qualifies you as an employer according to the IRS. Thus, you are responsible for tax withholdings, Social Security and, in some states, workers’ compensation.
Beyond the legalities, registering yourself as a household employer and registering your nanny or other household workers as an employee offer some benefits. These include:
- Building your employment history
- Enabling household staff to collect unemployment insurance
- Building your Social Security
- Helping household staff qualify for loans
- Potential tax breaks for household employers under the Dependent Care Assistance Program (DCAP) and the Child and Dependent Care Tax Credit
You need a federal EIN from the IRS. Tax accounts with state and local agencies may also be needed, so it’s best to check the relevant guidelines in your area. In addition to your and your nanny’s name and Social Security numbers, you’ll be asked to provide your email address, the physical address where household staff will provide service, and the phone number associated with the physical address.
It is also important that you get new hire documents from your household staff to help confirm their identity and if they are authorized to work in the United States. Note that you shouldn’t employ workers who are unable to provide these documents. You should also verify the information they provided through E-Verify.
No, you can’t. It is illegal to process payments for your household staff through your business payroll.
Bottom Line
As a domestic employer, you have responsibilities, which include paying payroll taxes and providing certain benefits. Failure to do so, even in ignorance, can cost you hundreds of dollars in penalties. The best nanny payroll service provides you with the information and tools you need to handle your household employee payroll correctly and keep yourself compliant with federal, state, and local laws.
We found that SurePayroll offers all the features that household employers need to manage nanny payroll. It has the expertise of working with small businesses but has a special program specifically for nannies and other household employees. It provides payroll, tax filing and payment services, and benefits. Plus, it’s the cheapest of the nanny payroll services on our list. Sign up for a SurePayroll plan and get one month free.
