What taxes does a family owe when they hire a nanny?

Families who pay a nanny $2,700 or more in a calendar year (2024 IRS threshold) must pay the employer's share of FICA taxes (7.65% of wages) and withhold the employee's share (7.65%). Federal Unemployment Tax (FUTA, 6% on the first $7,000 of wages) is also owed. Many states impose additional payroll taxes. These are reported on Schedule H of the family's federal tax return. Families may also be eligible for the Child and Dependent Care Tax Credit.

Can a nanny contract waive overtime pay?

No. Nannies who work more than 40 hours per week are entitled to overtime pay at 1.5 times their regular hourly rate under the Fair Labor Standards Act (FLSA). This right cannot be waived by contract. Some state laws, such as New York's Domestic Workers' Bill of Rights, provide even stronger overtime protections. Families should track hours carefully and pay overtime as required.

Does the nanny contract need to be notarized?

No. A nanny contract does not need to be notarized to be legally binding. A signed written agreement is sufficient. However, both parties should keep a signed copy for their records. Notarization adds an extra layer of authentication but is not legally required for employment agreements.

What should a confidentiality clause in a nanny contract cover?

A confidentiality clause should prohibit the nanny from sharing information about the family's home address, daily routines, financial matters, personal relationships, and anything learned in the course of employment. It should also include a social media and photography policy prohibiting the posting of photos or videos of the children without the family's written consent. Such clauses are enforceable as long as they do not prevent the nanny from reporting abuse or illegal conduct.

How much notice should be given before terminating a nanny?

Industry best practice is two weeks' notice, though many contracts provide for two to four weeks or longer for full-time nannies who have been employed for extended periods. Immediate termination without notice should be reserved for situations involving child safety concerns, gross misconduct, or material breach of contract. Some families provide severance pay equal to one to two weeks of wages as a matter of professional courtesy.

Free Nanny Contract Template — Fill Out & Download Instantly

Free — No Sign-Up RequiredPDF & WordUpdated April 5, 2026

⚠️ Legal Disclaimer: This template is attorney-reviewed and built to US legal standards. It does not substitute for professional legal advice. For complex situations, we recommend consulting a licensed attorney.

What Is a Nanny Contract?

A Nanny Contract is a written employment agreement between a family (employer) and a nanny or childcare provider (employee or independent contractor) that defines the terms of the childcare arrangement. This agreement protects both parties by clearly specifying work schedule, hourly pay rate, overtime policy, job duties, household rules, and termination procedures. Our free template covers both W-2 employee and 1099 independent contractor classification, and includes optional clauses for driving responsibilities, confidentiality, social media restrictions, paid time off, health insurance, and performance reviews.

When Do You Need It?

You need a Nanny Contract whenever you hire someone to provide regular childcare in your home. This includes hiring a full-time or part-time nanny, engaging an au pair under a formal arrangement, retaining a babysitter for recurring weekly care, or adding a nanny share arrangement with another family. A written contract establishes mutual expectations, documents pay and tax obligations, and provides a clear record of the employment terms — protecting both the family and the caregiver in the event of a dispute..

What's Included in This Template

Family and nanny identification and contact information
Employment classification (employee vs. independent contractor)
Work schedule and hours
Hourly rate and overtime policy
Payment frequency and method
Job duties and household responsibilities
Names and ages of children in care
Driving authorization and mileage reimbursement
Confidentiality and privacy obligations
Social media and photography policy
Paid time off, sick days, and holiday policy
Optional: Health insurance or benefits
Termination notice period
Governing law and dispute resolution
Signature blocks for both parties

How to Fill It Out

Select the Governing State — Choose the state where the family resides. Household employer laws, minimum wage requirements, and workers' compensation rules vary by state and directly affect nanny employment obligations.

Enter Family and Nanny Information — Provide the full legal names and addresses of the employing family and the nanny. Use accurate legal names to ensure the contract is enforceable and tax documents are filed correctly.

Set the Schedule and Pay — Describe the weekly work schedule, including days and hours. Enter the hourly rate and select how often the nanny will be paid. Federal law requires overtime pay (1.5×) for hours worked over 40 in a week for household employees.

Define Duties and Children in Care — List all job duties, including childcare tasks, light housekeeping, meal preparation, and school pickups. Enter the names and ages of all children in the nanny's care.

Address Driving, Confidentiality, and Social Media — Specify whether the nanny is authorized to drive the children, and if so, the mileage reimbursement rate. Enable confidentiality and social media clauses to protect the family's privacy.

Configure Benefits and Termination — Select applicable benefits such as paid time off, sick days, or health insurance. Set the notice period required from either party to terminate the arrangement.

Legal Requirements & Notes

Nanny employment is subject to a complex set of federal and state laws. Key obligations include: (1) FICA taxes — families who pay a household employee $2,700 or more in 2024 (IRS Publication 926 threshold, adjusted annually) must withhold and remit Social Security and Medicare taxes; (2) Federal income tax withholding is optional unless the employee requests it; (3) Federal Unemployment Tax (FUTA) applies if cash wages total $1,000 or more in any calendar quarter; (4) Workers' compensation insurance is required for household employers in most states; (5) Minimum wage and overtime — nannies are covered by the Fair Labor Standards Act (FLSA) and are entitled to federal minimum wage and overtime at 1.5× for hours over 40 per week; (6) Paid leave — several states (CA, NY, WA, MA, CT, and others) require paid sick leave for household employees; (7) Independent contractor misclassification — the IRS and Department of Labor apply multi-factor tests; most full-time nannies are employees, not contractors. This template is for informational purposes and does not constitute legal or tax advice. Consult an employment attorney or CPA familiar with household employer rules in your state.

Frequently Asked Questions

In the vast majority of cases, a nanny is legally classified as a W-2 household employee, not an independent contractor. The IRS applies a behavioral, financial, and relationship control test. Because families direct when, where, and how the nanny works, nannies almost always meet the definition of an employee. Misclassifying a nanny as a 1099 contractor can result in back taxes, penalties, and interest owed by the family.

Free Nanny Contract Template — Fill Out & Download Instantly

NANNY EMPLOYMENT CONTRACT

1. POSITION AND START DATE

2. CHILDREN IN CARE

3. WORK SCHEDULE

4. COMPENSATION

7. JOB DUTIES

8. DRIVING

9. CONFIDENTIALITY

10. SOCIAL MEDIA AND PHOTOGRAPHY POLICY

11. TERMINATION

12. EMPLOYMENT CLASSIFICATION

13. GOVERNING LAW

NANNY: