Nanny Contract Essentials

You've found the perfect nanny. The interviews went great, your kids loved them, the schedule works. Now comes the part nobody talks about: putting it all in writing.

A nanny contract isn't a corporate formality — it's a short, clear document that protects both of you. It prevents the awkward "I thought we agreed on..." conversations and makes sure you're meeting your state's employment requirements from day one.

Why You Need a Written Contract

Even though most states don't legally require a nanny contract, having one in writing prevents nearly every common dispute between families and caregivers. Here's why it matters:

For employers:

• It documents the agreed-upon pay rate, schedule, and overtime rules — which you're legally required to follow
• It shows you've communicated your state's sick leave and break requirements
• If there's ever a labor dispute, a signed contract is your best defense

For nannies:

• It guarantees your pay rate, hours, and benefits in writing
• It establishes how much notice you'll receive before termination
• It gives you documentation for unemployment claims if things don't work out

A verbal agreement is technically enforceable but nearly impossible to prove. A written contract takes 15 minutes and saves months of potential conflict.

What to Include

1. Both Parties' Information

Start with the basics: full legal names and addresses for both the employer and the nanny. This matters for tax purposes — your employer will need your address for your W-2.

2. Start Date and Position

When does employment begin? Is this full-time, part-time, or a temporary arrangement? If there's an end date (summer nanny, maternity leave coverage), state it clearly.

3. Schedule and Hours

Spell out the regular work schedule: which days, what hours, and total hours per week. This matters because it determines overtime obligations.

Overtime rules vary by state:

• Federal law: 1.5x pay after 40 hours per week
• California: 1.5x after 8 hours per day AND after 40 hours per week
• Some states have additional daily overtime thresholds

If the schedule is variable, describe how hours will be communicated and what the minimum guaranteed hours are.

4. Compensation

Cover these specifics:

• Gross pay rate (hourly or salary — most nannies are hourly, which is simpler for overtime)
• Pay frequency (weekly, biweekly, or semi-monthly)
• Overtime rate (required by law — usually 1.5x the regular rate)
• Payment method (direct deposit, check, etc.)

A critical detail: the pay rate in your contract should be the gross rate, not the net "take-home" amount. Taxes are withheld from the gross pay each period, and the net amount will vary based on the nanny's W-4 withholding elections.

Make sure the rate meets your state's minimum wage requirements. Some states like California, New York, and Washington have minimums well above the federal $7.25.

5. Time Off and Benefits

Paid time off (PTO): How many days per year? Do they accrue or are they available upfront? What happens to unused PTO at year-end — does it roll over or expire?

Sick leave: This isn't optional in many states. 17 states plus DC currently mandate paid sick leave for household employees. If your state requires it, your contract should reflect at least the minimum. Common accrual rates are 1 hour of sick leave per 30-40 hours worked. For a deeper dive on structuring time off, see our nanny PTO guide.

Holidays: List which holidays are paid days off. The standard approach is to pick 6-8 federal holidays (New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, Christmas) and specify whether working on a holiday means extra pay.

Other benefits: If you're providing health insurance stipends, mileage reimbursement, cell phone allowances, or meals, include those too.

6. Job Duties

Be specific about what the job includes — and what it doesn't. Common nanny duties:

• Primary childcare: meals, school transportation, homework help, bath time, bedtime routine
• Child-related housekeeping: children's laundry, tidying play areas, dishes from meals
• Additional duties: family laundry, cooking, grocery shopping, pet care, errands

If you're hiring a nanny and expecting housekeeping, name it. If housekeeping isn't part of the job, say so. Ambiguity leads to resentment.

7. House Rules

These seem minor but prevent friction:

• Screen time policies
• Dietary restrictions or guidelines
• Discipline approach
• Guest policy
• Personal phone use during work hours
• Car use (and who covers gas and insurance)

8. Trial Period

Many families include a 30-90 day trial period where either party can end the arrangement with shorter notice. After the trial, standard notice requirements apply.

9. Termination and Notice

How much notice does each party need to give? Two weeks is standard, but some states require more for household employees. Include:

• Notice period for voluntary resignation
• Notice period for termination
• Grounds for immediate termination (safety violations, theft, etc.)
• Final paycheck timing (many states require same-day or next-day payment upon termination)

10. Tax Acknowledgment

This is the section most templates miss. Both parties should acknowledge:

• The employer is responsible for withholding and remitting employment taxes (Social Security, Medicare, federal and state income tax)
• The nanny will receive a W-2 by January 31 each year
• The employer will comply with IRS Publication 926 requirements

This isn't just good practice — it's a legal obligation once wages exceed the annual threshold. Leaving it out of the contract doesn't exempt you from the requirement. Including it shows both parties understand and agree to do things properly.

State-Specific Requirements

Employment law varies significantly by state. Here are a few things to check:

Your contract should reflect your specific state's rules. Our free contract builder handles this automatically — select your state and it pre-fills the relevant requirements.

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Common Mistakes

1. Using net pay instead of gross pay. Your contract should state the gross hourly or weekly rate. The net amount changes based on tax withholding and isn't a reliable reference point.

2. Skipping overtime. Nannies are non-exempt employees under the FLSA. You must pay overtime regardless of what the contract says. A contract that says "no overtime" doesn't override federal law.

3. Classifying the nanny as an independent contractor. The IRS is clear: if you control when, where, and how the work is done, the worker is an employee. A contract calling someone a "contractor" doesn't change their actual classification. This mistake can result in back taxes, penalties, and interest. See our employee vs. contractor guide for the full breakdown.

4. Forgetting state-specific requirements. A generic template from the internet won't include your state's sick leave mandate or domestic worker protections. Use a state-specific builder or consult your state's labor department website.

5. Not updating the contract. If you change the schedule, raise the pay rate, or add duties, update the contract. An outdated contract is almost as bad as no contract.

Create Your Contract

Our free contract builder walks you through every section, pre-fills your state's requirements, and generates a professional agreement you can both sign. No signup required.

If you're already past the contract stage and need to set up payroll, our tax calculator shows you exactly what you'll owe — and NannyKeeper handles it all for $10/month.

Frequently Asked Questions

Is a nanny contract legally required?

In most states, no — but it's strongly recommended. Some states with Domestic Worker Bills of Rights (like New York and Illinois) require written notice of employment terms including pay rate and schedule. Even where not required, a written contract is your best protection in a dispute.

Can I use a template I found online?

You can, but generic templates miss state-specific requirements. Your state may mandate paid sick leave, specific break periods, or domestic worker protections that a one-size-fits-all template won't include. Our contract builder is customized for all 50 states.

What if we want to change the terms later?

Write up the changes, have both parties sign, and attach it to the original contract. Even a simple email confirming "we've agreed to increase pay to $X/hr effective [date]" is better than a verbal agreement.

Does the nanny have to sign the contract?

A contract is only enforceable if both parties agree to it. The nanny should review, ask questions, and sign willingly. If the nanny wants to negotiate terms, that's normal and healthy — it means they're taking the arrangement seriously.

Should I have a contract for a part-time nanny?

Yes. Part-time nannies have the same legal protections as full-time employees. If you're paying more than $3,000/year (about $58/week), you have tax obligations regardless of hours. A contract clarifies the arrangement and protects both parties.