Summer Nanny Taxes: What to Know Before June

School's almost out. You've found someone great to watch the kids this summer — a college student, a teacher on break, or a nanny between full-time gigs.

One question keeps coming up: do you actually owe taxes on a summer nanny?

Will You Hit the $3,000 Threshold?

The IRS doesn't care whether your nanny works year-round or just for the summer. What matters is total cash wages paid to that person in the calendar year.

If you're paying someone $500+/week for more than 6 weeks, you'll almost certainly cross $3,000. Use our calculator to check your exact situation.

For more on how the threshold works, see our complete threshold guide.

The College Student Question

Hiring a college student home for the summer? The same rules apply — with one exception.

If the student is your own child under 21, you're exempt from both FICA (Social Security and Medicare) and FUTA. No employment taxes at all. See our family employee exemptions guide for the full breakdown.

If they're someone else's kid, they're a regular household employee. Their age doesn't matter. A 19-year-old college student watching your children is taxed the same as a 45-year-old career nanny.

One thing college students often ask: "Can I be an independent contractor instead?" Almost never. If you set the schedule, the work happens in your home, and you direct what they do — they're your employee. The IRS is clear on this.

What to Set Up Before Day One

If you know you'll cross $3,000, do the paperwork before your summer nanny starts. It takes about an hour total.

Get an EIN. Free, 5 minutes, online. Full walkthrough here.

Have them fill out a W-4. This tells you how much federal income tax to withhold. Download from the IRS.

Check your state. Some states — like California, New York, and Massachusetts — require state-level registration, disability insurance, or paid family leave withholding even for short-term employees. Check your state's rules →

Set up payroll tracking. You need to calculate FICA (7.65% employee share + 7.65% employer share), withhold from each paycheck, and generate a W-2 in January. NannyKeeper handles all of this for $10/month.

Agree on pay. Decide whether the rate you discuss is gross (before taxes) or net (take-home). This avoids surprises on the first paycheck. Most families set a gross rate and explain that ~7.65% will be withheld for FICA.

Don't forget to check minimum wage requirements in your state — some states are well above the federal $7.25.

During the Summer

Once payroll is running, the ongoing work is minimal:

Each pay period (weekly or biweekly): Run payroll, record the taxes. About 5 minutes with NannyKeeper.

Keep records. Save pay stubs and track hours. If your state has overtime rules for household employees, those apply even for summer positions — check your state's requirements for specifics.

Mid-summer check. If you started with a part-time arrangement that's turned into more hours, recalculate whether you'll hit $3,000. It's easier to start withholding mid-summer than to catch up at year-end.

When Summer Ends

Your nanny's last day doesn't mean your obligations are done. A few things to wrap up:

Final paycheck. Pay all hours worked through the last day, including any accrued time off if your state requires it. Withhold taxes as usual.

Keep your records. You'll need them in January. Don't delete your payroll data just because the job is over.

W-2 by January 31. Even though the job ended in August, you must give your summer nanny a W-2 by January 31 of the following year. NannyKeeper generates this automatically — you just need their mailing address.

Schedule H. File this with your personal tax return (Form 1040) by April 15. It covers all household employment taxes for the year. Our Schedule H guide walks through every line.

FUTA and SUTA. If you paid $1,000+ in any quarter, you owe federal unemployment tax (0.6% on the first $7,000 of wages). Most states also require unemployment insurance. Check the quarterly deadlines.

What If You Don't Think You'll Hit $3,000?

If you're confident you'll stay under the threshold — say, a part-time sitter for just 4-5 weeks — you don't need to withhold or pay employment taxes.

But keep a log anyway. Write down dates and amounts after each payment. If the arrangement extends or hours increase, you'll know exactly where you stand.

If you do cross mid-summer, start withholding immediately. You'll owe employer taxes on the full amount from dollar one, but you can begin withholding the employee's share from that point forward. See our threshold guide for how this works.

FAQ

Do I owe taxes if my summer nanny only works 6 weeks?

It depends on how much you pay, not how long they work. Six weeks at $600/week = $3,600 = yes, you owe taxes. Six weeks at $400/week = $2,400 = no. The $3,000 threshold is what matters.

Can I pay my summer nanny as a 1099 contractor?

Almost certainly not. If they work in your home, on your schedule, caring for your children — they're a W-2 employee. Misclassifying them as a contractor can result in IRS penalties. Read our employee vs. contractor guide.

What if I hire two different nannies for different parts of the summer?

The threshold is per worker. If you pay Nanny A $2,500 and Nanny B $2,000, neither crosses $3,000 and you owe no employment taxes on either. But if Nanny A earns $3,500, you owe taxes on Nanny A regardless of what you paid Nanny B.

Do I need workers' comp for a summer nanny?

It depends on your state. Some states — including New York and California — require workers' compensation insurance for all household employees, even temporary ones. Check your state →

What about a summer au pair?

Au pairs are different. They're on J-1 visas and are exempt from FICA taxes. You may still owe federal income tax withholding if they request it. Our nanny vs. au pair tax guide covers the full comparison.