How do I register as a household employer in Kentucky?

Start with a federal EIN, then register with Kentucky for each account that applies to you. Apply for a federal EIN at IRS.gov. It is free and takes about 15 minutes. Register with Kentucky's unemployment insurance agency once you cross $1,000 in any calendar quarter. Most states want this within 20 days of becoming a covered employer. If you will withhold Kentucky income tax at your nanny's request, register separately with the state revenue department for a withholding account. You may also need a local income tax registration, depending on your nanny's work or home municipality. A local occupational license tax applies in most Kentucky cities and counties.

What payroll taxes does Kentucky charge for a household employee?

Federal FICA and FUTA, Kentucky SUTA, and anything else below that applies to you. Federal FICA: 7.65% employer share, matched by your nanny. Federal FUTA: 6.0% on the first $7,000, an effective 0.6% after the state SUTA credit. Kentucky SUTA: 0.3% - 9% on a state-specific wage base, with a separate rate for new employers. State income tax withholding is optional unless your nanny elects it on the state W-4. Local income tax may also apply. A local occupational license tax applies in most Kentucky cities and counties.

What are Kentucky's minimum wage and overtime rules for nannies?

At least $7.25 an hour for a nanny in Kentucky. Kentucky sets no rate above the federal floor, so the federal minimum is what binds. Some cities and counties may set a higher floor, so check your locality before you set a rate. Overtime is 1.5x pay for hours over 40 in a week, under the FLSA. Live-in nannies are exempt from FLSA overtime, but not from minimum wage. Source: US DOL, State Minimum Wage Laws.

Can I require my nanny to use direct deposit in Kentucky?

Yes. Kentucky allows direct deposit for household employees. Federal Regulation E still applies: your nanny must be free to choose their own bank, or you offer another payment method. Get a written, signed authorization before the first deposit, even though Kentucky does not strictly require one.

What records do I need to keep for a Kentucky household employee?

Keep them for at least 4 years after the return reporting the tax was due, or the tax was paid, whichever is later. Timesheets, pay stubs, W-2 copies, payment confirmations and SUTA filings. Kentucky follows the federal baseline, so 4 years covers both. Most household-employer audits open with the IRS or a state agency asking for exactly these records, so keep them with your tax filings. Source: IRS Publication 926.

All State Guides

Kentucky Nanny Tax Guide

Louisville (2.2% for residents) and Lexington (2.25%) charge occupational license taxes that NannyKeeper withholds for you. Many other Kentucky cities and counties charge one too, and a few exempt household employees.

Kentucky household employer quick facts

Applies in Kentucky

State income tax withholding
State unemployment

Not in Kentucky

Disability insurance
Paid family leave

Minimum Wage

$7.25/hour (federal)

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SUTA Rate Range

0.3% - 9%

New employers: 2.7% on the first $12,000 (2026). Kentucky Office of Unemployment Insurance

Key things to know

Flat state income tax of 3.5%
Local occupational taxes in Louisville & Lexington
Uses federal minimum wage
Standard deduction of $3,360

Kentucky Employer Requirements

State Income Tax

Kentucky uses a flat 3.5% income tax rate. A standard deduction of $3,360 (single) or $6,720 (married) reduces taxable income.

Local Occupational Taxes

Many Kentucky cities and counties charge an occupational license tax on work done there. We withhold it in the places we cover and tell you when a household employee is exempt; check your own city and county too. Louisville's 2.2% already includes Jefferson County's school tax. We calculate the Fayette and Boone County school taxes only when both the work address and the nanny's home address are in the district; other school district taxes aren't calculated yet.

State Unemployment Insurance

Employers pay SUI tax on the first $12,000 of wages. New employer rate is 2.7%, with rates ranging from 0.3% to 9.0% based on experience.

Workers' Compensation

Kentucky doesn't require workers' compensation for a typical single-nanny household (coverage becomes required once you have 2 or more household workers each working 40+ hours a week). It's still worth considering: it protects your employee if they're injured at work, and protects you from potential liability.

Kentucky household employer questions

What will it cost?

Wondering what you'll actually owe as a Kentucky employer? Adjust the numbers below to get a quick estimate of your annual tax obligations.

This guide is for informational purposes only and should not be considered legal or tax advice. Tax laws change frequently. Always verify current requirements with your state's tax agency or consult with a qualified tax professional.

Verified accurate as of June 2026Sources: Kentucky tax agency, IRS Publication 926

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Kentucky Nanny Tax Guide

Kentucky household employer quick facts

Kentucky Employer Requirements

State Income Tax

Local Occupational Taxes

State Unemployment Insurance

Workers' Compensation

Kentucky household employer questions

What will it cost?

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