(713) 526-3989
Call Our Houston Office For a Complimentary Consultation (713) 526-3989
Indera is just wonderful. She is always happy and clearly loves her job. She is kind and fun and as for the practicalities, she is always on time and very flexible.
Mrs Carter

Household Employer Responsibilities

While it’s often assumed that nannies and parents have a casual working arrangement or that nannies are independent contracts, this is simply not the case.

Nannies are the employees of the parents for whom they work.

As such, parents have legal and tax obligations.

Verifying Eligibility to Accept Employment

Parents must complete and keep on file form I-9 from the Department of Homeland Security. All nannies must be legally authorized to accept work in the United States.

Reporting New Hires

All nanny employers must report new hires to their appropriate state agency. In Texas, employers report to the Employer New Hire Reporting Center in the Office of the Texas Attorney General.

Obtaining Workers’ Compensation Insurance

While some states require employers to have workers’ compensation coverage, Texas does not. However, you should consult with your insurance agency to discuss the benefits of coverage.

Complying with the Fair Labor Standards Act

By law, nannies must be paid at least minimum wage for every hour worked. Parents must also keep track of their nanny’s hours. A simply notebook can be used to track a nanny’s arrival and departure time from the home.

Nannies are classified as non-exempt employees who must be paid hourly. According to federal law, household employees are also entitled to overtime pay. Overtime must be paid at 1.5 times the regular hourly rate for all hours worked over 40 hours in a 7-day work week. For your own protection, if a household employee is paid a salary based on a work week of more than 40 hours, your employment agreement with your nanny should explicitly state the regular and overtime rates of pay.

For example, the gross salary of $1000 per week for a 45-hour work week could be dealt with as the hourly wage for the first 40 hours is $21.06, and the overtime wage for the remaining 5 hours per week is $31.59 per hour; the total weekly salary is $1000.

Live-in household employees in Texas do not have to be paid overtime but are entitled to regular pay for every hour worked.

Complying with Tax Laws

As employers, parents have specific tax obligations. If you pay more than the annual wage threshold to your nanny, $2700 per calendar year for 2024, you will have tax obligations. These obligations are equivalent to approximately 10% of your nanny’s gross annual salary. Household employer obligations include paying your portion of Social Security and Medicare (FICA) and paying federal (FUCA) and state unemployment insurance and disability if required. Parents must also withhold and pay the nanny’s portion of FICA. This is required. Nannies are responsible for federal and state income taxes and employee disability or unemployment, when required. Parents must also provide their nanny with a W-2 for each year of employment.

For parents who pay their nanny legally and who are complaint with tax laws, there are tax breaks and incentives that can offset the costs of paying legally. In fact, the tax savings may exceed your share of taxes.

These include:

Dependent Care Account or Flexible Spending Account. Many companies allow employees to contribute up to $5,000 of their pretax earnings to an individual Dependent Care Account. The money in this account is then used to cover childcare expenses, free of taxes. The savings are approximately $2,300 per year.

Tax Credit. If you don’t have a Dependent Care Account, you can claim the Tax Credit for Child or Dependent Care (Form 2441) on your income tax return. You can take a tax credit of 20% to 30% on qualifying childcare expenses. But expenses are limited to $3,000 for one dependent or $6,000 for two or more dependents. The savings from this tax break are $600 – $1,200 depending on number of dependents.

For parents who would like assistance managing their household pay and tax responsibilities and obligations, the following industry leaders provide free consultations to clients of Morningside Nannies:


Register with our Preliminary Nanny Provider Application

Morningside Nannies 22136 Westheimer Pkwy #704
Katy, TX 77450
Directions »

Office Hours:
Monday - Friday
8:30am - 5:00pm

(713) 526-3989
Fax: (888) 503-1310