You're reviewing your nanny's hours and it hits you: she worked 45 hours last week. Does that mean you owe overtime? And if so, how much?
The short answer: probably yes. But the details depend on whether your nanny lives with you, what state you're in, and how you've structured their pay.
The 40-Hour Rule
If your nanny works more than 40 hours in a single workweek, you owe time-and-a-half for every extra hour.
The Fair Labor Standards Act (FLSA) treats household employees the same as most other workers when it comes to overtime. Your nanny is a non-exempt hourly employee, which means:
- Regular time: The first 40 hours each week at their normal hourly rate
- Overtime: Every hour beyond 40 at 1.5x their regular rate
A "workweek" is any fixed, recurring 168-hour period (7 consecutive 24-hour days). You pick when it starts — Sunday, Monday, whenever — but once you set it, keep it consistent.
One thing that trips up families: overtime is calculated per workweek, not averaged across a pay period. If your nanny works 50 hours one week and 30 the next, you owe 10 hours of overtime for that first week. You can't average them to 40.
How to Calculate Overtime Pay
Multiply your nanny's hourly rate by 1.5 for every hour over 40. The math is straightforward.
The Rivera family pays their nanny $22/hour. Last week she worked 46 hours:
| Hours | Rate | Pay |
|---|---|---|
| 40 regular hours | $22.00/hr | $880.00 |
| 6 overtime hours | $33.00/hr (1.5 x $22) | $198.00 |
| Total | $1,078.00 |
As the employer, you still owe your 7.65% share of FICA taxes on the full $1,078. Overtime doesn't change your tax obligations.
Use our nanny tax calculator to see exactly what you'd owe with overtime included.
The Live-In Nanny Exception
Under federal law, live-in nannies don't get overtime pay. But 9 states override this and require it anyway.
The FLSA carves out a specific exemption for domestic workers who live in their employer's home "permanently or for extended periods of time." If your nanny qualifies as live-in under federal rules, you must still pay minimum wage for all hours worked, but you don't owe the time-and-a-half overtime premium.
What counts as "live-in"? The nanny must actually reside in your home — not just work long shifts or occasionally stay overnight. A nanny who sleeps over two nights a week isn't live-in under the FLSA.
But here's the catch: your state may have different rules. Nine states don't recognize the federal live-in exemption and require overtime for household employees regardless of living arrangement. More on that in the next section.
For a deeper look at live-in employment, see our live-in nanny tax guide.
States With Their Own Overtime Rules
Nine states require overtime for live-in domestic workers, and the thresholds vary from 40 to 48 hours per week.
If you're in one of these states, state law overrides the federal live-in exemption:
| State | Live-In OT Threshold | Key Details |
|---|---|---|
| California | 9 hrs/day or 45 hrs/week | Personal attendants (80%+ caregiving). Other domestics: 8 hrs/day or 40 hrs/week |
| Hawaii | 40 hrs/week | Standard time-and-a-half |
| Maryland | 40 hrs/week | Standard time-and-a-half |
| Massachusetts | 40 hrs/week | Standard time-and-a-half |
| Minnesota | 48 hrs/week | Higher threshold than most states |
| Nevada | Varies | Exempt only with written agreement |
| New Jersey | 40 hrs/week | Standard time-and-a-half |
| New York | 44 hrs/week | Plus mandatory day of rest per week |
| Oregon | 44 hrs/week | Standard time-and-a-half |
Not on the list? If your state isn't here, the federal FLSA live-in exemption applies — live-in nannies aren't entitled to overtime at the federal level. But live-out nannies in every state still get overtime after 40 hours.
California deserves a closer look. The Domestic Worker Bill of Rights (AB 241) creates two categories:
- Personal attendants (80%+ of time spent on direct caregiving): overtime after 9 hours in a day or 45 hours in a week
- Other domestic workers (nannies who do significant housekeeping, cooking, etc.): overtime after 8 hours in a day or 40 hours in a week, plus double time after 12 hours in a day
If your nanny spends more than 20% of their time on non-caregiving tasks, they fall into the second category with lower overtime thresholds.
New York also goes further than most states. Under the Domestic Workers' Bill of Rights:
- Overtime after 40 hours (live-out) or 44 hours (live-in)
- A mandatory 24-hour day of rest every week
- 3 paid days off per year after one year of employment
Check your state's full requirements →
New for 2026: The Overtime Tax Deduction
The One Big Beautiful Bill Act (signed July 2025) created a new federal income tax deduction for overtime pay, effective for tax years 2025 through 2028. Your nanny may be able to deduct the premium portion of their overtime from their taxable income. This doesn't change what you owe as the employer.
What qualifies: Only the "extra half" of time-and-a-half counts. If your nanny earns $22/hour and gets $33/hour for overtime, only the $11 premium per overtime hour is deductible — not the full $33.
Deduction limits:
- Up to $12,500 per year (single filer)
- Up to $25,000 per year (married filing jointly)
- Phases out at $150,000 MAGI ($300,000 for joint filers)
What it means for you as the employer:
- You still owe FICA (7.65%) on all overtime wages — this deduction is income tax only
- Starting in 2026, you must report qualified overtime on the W-2 in Box 12, Code TT
- Only FLSA-required overtime qualifies — not voluntary extra hours or state-mandated overtime above federal requirements
For the full breakdown, read our guide to the OBBBA overtime rule.
What Counts as "Hours Worked"
Any time your nanny is required to be at your home or available for duties counts toward the 40-hour threshold.
This is where families get tripped up. "Hours worked" includes more than active childcare:
- Waiting time: Your nanny is at your home during a child's nap — that counts. They're on duty even if the kids are asleep.
- Meal breaks: Only count as non-working time if the nanny is completely relieved of duties for at least 30 minutes. If they're expected to listen for the baby, it's working time.
- Travel time: Driving your kids to school or activities is working time. Commuting to your home is not.
- Overnight stays: For live-in nannies, employers and employees can agree in writing to exclude sleep time (up to 8 hours) and meal times — but only if the nanny gets at least 5 consecutive hours of uninterrupted sleep.
If your nanny has to be at your home and available, those hours count — even if the kids are sleeping.
Keeping Records
Federal law requires you to track and retain records of your nanny's hours worked, pay rate, and total wages. There's no specific format required, but you should keep:
- Daily hours worked (start time, end time, breaks)
- Weekly total hours
- Regular and overtime hours separately
- Pay rate and total compensation per pay period
Keep these records for at least three years. If your nanny ever disputes their pay, your records are your protection.
See what you'll owe
Use our free calculator to estimate your nanny tax costs for 2026.
FAQ
Do I owe overtime for occasional date nights?
It depends on total hours for the week. If your regular nanny already works 35 hours Monday through Friday and you add a 6-hour Saturday night, that's 41 hours — one hour of overtime. A separate babysitter you hire just for date nights wouldn't trigger overtime unless they also exceed 40 hours.
Can my nanny and I agree to skip overtime?
No. Overtime is a legal requirement under the FLSA, and you can't waive it by agreement. Even if your nanny says they don't want overtime pay, you're still required to pay it. The only exception is the federal live-in exemption (and even that doesn't apply in 9 states).
Does overtime apply if I pay a salary?
If you pay your nanny a weekly salary, you still owe overtime. Divide the weekly salary by the number of hours it covers (up to 40) to get the hourly rate. Hours beyond 40 must be paid at 1.5x that rate. You cannot set a salary to cover "all hours including overtime" — that's not legal under FLSA.
What if my state minimum wage is higher than federal?
You must pay whichever is higher — federal or state. When calculating overtime, use the actual hourly rate you're paying (which should be at or above your state minimum). Check your state's current rate on our minimum wage by state guide.
How does overtime interact with the $3,000 nanny tax threshold?
Overtime wages count toward the $3,000 annual threshold. If your babysitter is close to the line and you start paying overtime, they could cross it faster than expected. Use our calculator to track where you stand.