If you employ a nanny in New York, you're dealing with one of the most comprehensive sets of household employment requirements in the country. New York has strict compliance rules, mandatory workers' compensation, and multiple state-level taxes. But don't worry. We'll break down exactly what you owe, when it's due, and how to stay compliant without the stress.

Quick Overview: What New York Families Owe

As a household employer in New York, you're responsible for:

Federal taxes:

Social Security (6.2% employer share)
Medicare (1.45% employer share)
Federal unemployment (FUTA)
Federal income tax withholding (if your nanny requests it)

New York state taxes:

State income tax withholding (voluntary for household employees)
Disability Benefits Law (DBL) and Paid Family Leave (PFL) coverage, once your nanny works 20+ hours a week, counting every hour you need them there, nights included, and has 30 days of work in the year; the employee share is withheld once coverage takes effect, four weeks after that 30th day
State Unemployment Insurance (SUI)
Workers' Compensation Insurance (mandatory at 40+ hours/week for the same employer)

New York is hands-down one of the most regulated states for household employers. But once you understand the system, it's manageable, and staying compliant protects both you and your nanny.

When Do New York Nanny Taxes Apply?

The federal threshold is $3,000 per year for 2026. If you pay your nanny $3,000 or more in a calendar year, you're a household employer subject to federal payroll taxes.

For New York state taxes:

State unemployment: You owe if you pay $500+ in any calendar quarter
Workers' comp: Required if you employ anyone for 40+ hours per week

Translation: If you have a regular nanny (even part-time), you're almost certainly subject to both federal and New York taxes.

Breaking Down New York Nanny Taxes

Federal Taxes (Same for All States)

1. Social Security & Medicare (FICA)

Social Security: 6.2% employer + 6.2% employee = 12.4% total
Medicare: 1.45% employer + 1.45% employee = 2.9% total

You pay half, your nanny pays half (you withhold their portion).

2. Federal Unemployment Tax (FUTA)

Rate: 6% on first $7,000 in wages
Credit: 5.4% if you pay state unemployment on time
Effective rate: 0.6% = $42/year max

3. Federal Income Tax Withholding Optional unless your nanny requests it via Form W-4. Most nannies do request withholding to avoid a large tax bill in April.

New York-Specific Taxes

1. New York State Income Tax Withholding (VOLUNTARY)

New York income tax withholding is voluntary for household employees. If you and your nanny agree to it, use the state certificate and withholding tables below.

Your nanny fills out Form IT-2104 (Employee's Withholding Allowance Certificate)
You calculate withholding using NYS withholding tables
Rates vary based on income and allowances claimed
File quarterly using Form NYS-45 (Quarterly Combined Withholding, Wage Reporting and Unemployment Insurance Return)

2. Disability Benefits Law (DBL) and Paid Family Leave (PFL)

When it applies: Once your nanny works 20 or more hours a week for you, counting every hour you need them there, nights included, and has worked 30 days in the calendar year. The policy must be in place within four weeks of that 30th day, and withholding starts when coverage takes effect at the end of those four weeks. Below that, coverage is voluntary (Form DB-135 or DB-136). PFL rides on the same policy under the same rule; its employee contribution is in the cost example below.

Who pays for DBL: Your nanny (you withhold from their paycheck)

Rate: 0.5% of gross wages, capped at a $0.60 weekly deduction

What it covers: Short-term disability benefits if your nanny becomes unable to work due to illness or injury

For 2026, the maximum weekly deduction is $0.60. The premium is paid to the private insurance carrier or NYSIF, not to the state tax department.

3. State Unemployment Insurance (SUI)

Who pays: You (the employer)

Rate: New employers typically pay 4.025% on the first $17,600 in wages per employee

Max cost: ~$708.40/year for new household employers

Your rate can change based on your "experience rating," but most household employers stay near the new employer rate since nannies rarely file unemployment claims.

4. Workers' Compensation Insurance (MANDATORY AT 40+ HOURS/WEEK)

New York requires workers' compensation insurance when a domestic employee works 40 or more hours per week for the same employer. Hours count the way the state counts them, every hour you need your nanny there, nights included, so a live-in almost always reaches 40. Coverage generally isn't mandatory below that, though voluntary coverage may still be prudent.

Cost: Your insurer sets the premium from the wages you pay, so ask for a quote

You can get household workers' comp through:

State Fund (NYSIF)
Private insurance carriers
Your homeowners policy (some include coverage)

Going without coverage is expensive. The Workers' Compensation Board can assess a civil penalty of up to $2,000 for every ten days you are uninsured, or up to twice what the coverage would have cost. Employing someone without it is also a misdemeanor with a fine of $1,000 to $5,000. And if your nanny is hurt on the job, you pay every benefit out of pocket and can be sued directly. If a penalty notice arrives, you have 30 days to ask for a reduction.

What About Federal Taxes?

Don't forget, on top of New York's requirements, you still owe federal nanny taxes:

Social Security: 6.2% employer + 6.2% employee = 12.4% total
Medicare: 1.45% employer + 1.45% employee = 2.9% total
FUTA: 6% on first $7,000 (but credit reduces to 0.6% = $42/year max)

See our complete nanny tax guide for federal details.

Bottom line: Expect to pay about 10-12% of your nanny's wages in employer-side taxes (federal + state combined).

New York Nanny Tax Deadlines

Here's when everything is due:

Quarterly (Every 3 Months)

New York State Taxes (withholding + unemployment):

Q1 (Jan-Mar): Due April 30
Q2 (Apr-Jun): Due July 31
Q3 (Jul-Sep): Due November 2, 2026 (October 31 is a Saturday)
Q4 (Oct-Dec): Due February 1, 2027 (January 31 is a Sunday)

File using Form NYS-45 (Quarterly Combined Withholding, Wage Reporting and Unemployment Insurance Return)

Federal Estimated Taxes (optional):

Q1: April 15
Q2: June 15
Q3: September 15
Q4: January 15

Use Form 1040-ES if you're making quarterly payments.

Annually (Once a Year)

W-2 for your nanny: Due February 1, 2027 (January 31 falls on Sunday)

Schedule H (with your federal 1040): Due April 15

Form NYS-45-ATT (Annual wage reconciliation): Due with Q4 filing

Workers' Comp Policy: Renew annually

How to Register as a Household Employer in New York

Here's your step-by-step setup:

Step 1: Get a Federal Employer Identification Number (EIN)

You need an EIN to report payroll taxes. It's free and takes 5 minutes online.

See our EIN guide for step-by-step instructions

Step 2: Register with New York State Department of Taxation and Finance

Once you have your EIN:

Go to NY.gov Business Express
Register as a new employer
Select "Household Employer" as your business type
You'll receive:
- NYS Employer Registration Number
- Unemployment Insurance account number
- Withholding account number

Step 3: Check Workers' Compensation Coverage

Coverage is mandatory when the domestic employee works 40 or more hours per week for the same employer.

Options:

New York State Insurance Fund (NYSIF): ww3.nysif.com
Private carriers: Shop around for rates
Homeowners policy: Check if your policy covers household employees

You'll need your policy number and certificate of insurance on file.

Step 4: Give Your Nanny Tax Forms

Have your nanny complete:

Form W-4: Federal income tax withholding
Form IT-2104: New York state withholding
Form I-9: Verify work authorization (required within 3 days of hiring)

Keep these in your records. You'll need them for payroll calculations.

Real-World Example: What You'll Actually Pay

Let's say you hire a nanny in New York who works 40 hours/week at $20/hour.

Gross wages: $3,467/month ($20/hour × 173.33 hours)

Employer taxes you pay:

Social Security (6.2%): $215
Medicare (1.45%): $50
FUTA (0.6% on first $7,000/year): ~$4/month average
NY SUI (4.025% on first $17,600/year): ~$59/month average
Total employer taxes: ~$328/month
Plus your workers' comp premium, which your insurer sets

Employee taxes you withhold:

Social Security (6.2%): $215
Medicare (1.45%): $50
DBL disability (0.5% of wages, capped at $0.60/week), once coverage is in place: ~$2.60/month
NY Paid Family Leave (0.432% of wages), once coverage is in place: ~$15/month
NY state income tax (varies, estimate ~3%): $104
Federal income tax (depends on W-4, estimate ~10%): $347
Total withheld: ~$734/month

Your nanny's take-home: $2,733/month
Your total cost: $3,795/month ($3,467 wages + $328 employer taxes), plus your workers' comp premium

Bottom line: Budget about 9.5% on top of wages for the taxes you pay as the employer, plus your workers' comp premium.

Common New York Nanny Tax Questions

Do I need workers' comp if my nanny works less than 40 hours/week?

Not usually below 40 hours, counted the way the state counts them (every hour you need your nanny there, nights included, so a live-in almost always reaches 40). Mandatory coverage begins at 40 or more hours per week for the same employer; voluntary coverage may still be worthwhile.

What if my nanny is a family member?

You still owe taxes in most cases. Exceptions:

Your spouse
Your child under age 21
Your parent (with some exceptions)

If your nanny is your sibling, cousin, or adult child, you owe taxes just like any other household employer.

Can I classify my nanny as an independent contractor?

No. New York (and federal law) have strict rules. If you control what work is done and how it's done, they're an employee. Misclassifying can lead to massive penalties.

What if I pay my nanny cash?

Paying in cash is fine, but you still owe taxes. "Cash under the table" (unreported) is tax evasion. Use direct deposit instead for a clean paper trail.

Learn how to set up direct deposit

What happens if I don't have workers' comp insurance?

Real ones. The Board can assess up to $2,000 for each ten-day period without coverage, or up to twice what the policy would have cost, and going uninsured is a misdemeanor with a fine of $1,000 to $5,000. You are also personally liable for any injury your nanny suffers on the job, with no insurer standing between you and the claim.

Don't skip this one.

How NannyKeeper Can Help

New York nanny taxes are complex, probably the most complicated in the nation. You're dealing with:

Federal taxes (Social Security, Medicare, FUTA)
State withholding tax (NYS-45 quarterly)
Unemployment insurance (SUI)
Disability insurance (DBL), once coverage applies
Workers' comp insurance (annual)
W-2 generation
Schedule H filing

NannyKeeper helps you calculate and organize it:

Automatic payroll calculation (federal + NY taxes)
Quarterly NYS-45 calculation and filing guidance
W-2 generation and filing instructions
Schedule H prep for your tax return
Direct deposit to your nanny's bank account
Compliance tracking

We calculate, you review and submit. No tax degree required.

What Happens If You Get Audited?

The NYS Department of Labor and Department of Taxation actively pursue unreported household employment. Common triggers:

Your nanny files for unemployment
Your nanny files a workers' comp claim and you don't have insurance
Your nanny reports wages from an unreported employer on their tax return
Random audit selection

If you get audited without having paid taxes, expect:

Back taxes: Everything you should have paid (up to 3 years, longer if fraud)
Interest: Accrues from original due dates
Penalties:
- Failure to file: 5%/month, up to 25%
- Failure to pay: 0.5%/month, up to 25%
- Workers' comp violations: up to $2,000 for each ten-day period without coverage, or up to twice what the coverage would have cost

For a nanny earning $40,000/year, three years of back taxes could easily cost $18,000-25,000 in taxes, penalties, and interest.

Get compliant now. It's way cheaper than dealing with an audit.

New York vs. Other States

Here's how New York stacks up:

Feature	New York	California	Texas	Florida
State Income Tax	Voluntary household withholding	Voluntary household withholding	❌ None	❌ None
Unemployment Tax	✅ 4.025% (~$708/yr)	✅ 3.4% UI + 0.1% ETT (~$245/yr)	✅ 2.7% (~$243/yr)	✅ 2.7% (~$189/yr)
Disability Insurance	✅ 0.5% (employee, once coverage applies)	✅ 1.1% (employee)	❌ None	❌ None
Workers' Comp	✅ Mandatory	✅ Mandatory	❌ Optional	✅ Mandatory
Complexity	🔥🔥🔥 High	🔥🔥🔥 High	🔥 Low	🔥🔥 Medium

New York is tied with California for the most complex household employment requirements. More paperwork, higher costs, stricter enforcement.

Tips for Staying Compliant in New York

1. Set Up Direct Deposit

Stop writing checks. Direct deposit:

Creates a clear paper trail
Ensures timely payment
Reduces errors

Read our direct deposit guide

2. Keep Digital Records

Save everything for at least 4 years:

Payroll records (hours, gross, withholdings)
Bank statements
Tax forms (W-2, W-4, IT-2104, Schedule H, NYS-45)
Workers' comp policy and payment receipts

Use cloud storage (Google Drive, Dropbox) for safety.

3. Set Aside Tax Money

Every paycheck, set aside about 10% of gross wages in a separate account. This covers your employer-side taxes (about 9.5% in the example above) and ensures you're never scrambling when quarterly deadlines hit.

4. Check the Workers' Comp Threshold

Coverage is mandatory once a domestic employee works 40 or more hours per week for the same employer. If the worker is below that threshold, confirm whether voluntary coverage makes sense before work begins.

5. File Quarterly, Pay Annually

You can file NYS-45 quarterly but pay your federal taxes annually with Schedule H (as long as you increase your own income tax withholding to cover it). This simplifies cash flow for most household employers.

6. Get Compliant Now If You're Behind

If you've been paying off the books and want to get compliant:

Calculate what you owe (use NannyKeeper or a CPA)
File back tax returns (NYS-45, Schedule H)
Pay what you owe (payment plans available)
Get current going forward

The penalties are lower if you come forward voluntarily vs. waiting for an audit.

The Bottom Line

New York nanny taxes are among the most complex in the nation, but they're not impossible. You'll pay:

~9.5% in employer-side taxes (Social Security, Medicare, unemployment), plus your workers' comp premium
Withholding varies with voluntary federal/state income-tax elections, plus Social Security, Medicare, and DBL once coverage applies

For a nanny earning about $3,500/month, the example above estimates about $328/month in employer taxes, before your workers' comp premium. Your actual cost depends on your assigned SUI rate, and the premium on what your insurer charges.

Next steps:

Get your EIN (5 minutes, free)
Register with NYS Tax & Finance
Get workers' comp insurance if the 40-hour household threshold applies
Set up payroll (or let NannyKeeper do it)

You've got this. And if you want help, we're here.

Get started with NannyKeeper →

Related guides:

Have questions? Email us at support@nannykeeper.com or check out our complete nanny tax guide for more details.

New York-Specific Resources

New York State Department of Taxation and Finance

Website: tax.ny.gov
Employer Registration: NY Business Express
Withholding Tax Helpline: 518-485-6654

New York State Department of Labor

Unemployment Insurance: labor.ny.gov/ui
UI Employer Hotline: 518-457-9000

New York Workers' Compensation

State Insurance Fund: ww3.nysif.com
Workers' Comp Board: wcb.ny.gov

IRS Resources

Why New York Enforcement Is Strict

New York actively enforces household employment laws more aggressively than most states. Here's why:

1. Workers' Comp Violations Are Criminal

Not having workers' comp insurance is a criminal misdemeanor in New York. The state can (and does) prosecute household employers who don't carry coverage.

2. The "Nanny Tax" Scandal Legacy

Remember the 1990s scandals when political nominees were rejected for not paying nanny taxes? New York hasn't forgotten. The state makes examples of high-profile cases.

3. Strong Labor Protections

New York has some of the strongest worker protection laws in the nation. Household employees are entitled to the same protections as any other worker.

4. Easy to Get Caught

Your nanny will eventually:

File their tax return (and report wages from an employer)
Apply for unemployment if laid off
File a workers' comp claim if injured
Apply for state disability if they become unable to work

When they do, the state will ask questions. If you haven't been paying taxes, you'll be flagged.

Final Thoughts

New York nanny taxes are comprehensive, expensive, and strictly enforced. But once you understand the system, it becomes routine:

The big picture:

Federal taxes: Social Security, Medicare, FUTA
State withholding: Quarterly NYS-45 filings
State unemployment: 4.025% on first $17,600 for a typical new employer
DBL and PFL coverage: required once your nanny works 20+ hours a week, counted the way the state counts them, and has 30 days of work in the year, with the policy in place within four weeks of that 30th day (WCB coverage rules)
Disability insurance (DBL): 0.5% of wages withheld from nanny once coverage is in place, capped at $0.60/week (WCL § 209)
Paid Family Leave (PFL): 0.432% of wages withheld from nanny once coverage is in place, up to $411.91/year (NY PFL 2026)
Workers' comp: Mandatory at 40+ hours/week for the same employer, priced by your insurer
W-2 + Schedule H annually

For a full-time nanny earning $40,000/year, expect to pay about $3,800/year in employer-side taxes, plus your workers' comp premium. That's the cost of doing it legally, and it's way cheaper than the penalties for not paying.

You can do this.

Thousands of New York families employ nannies compliantly every year. Get your EIN, register with the state, check workers' comp coverage, and set up payroll. Or use NannyKeeper to calculate payroll and generate the records and forms you review and submit.

Either way, you'll sleep better knowing you're compliant, your nanny is protected, and you won't face an audit years from now.