How do I register as a household employer in Vermont?

Start with a federal EIN, then register with Vermont 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 Vermont'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 Vermont income tax at your nanny's request, register separately with the state revenue department for a withholding account.

What payroll taxes does Vermont charge for a household employee?

Federal FICA and FUTA, Vermont 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. Vermont SUTA: 0.5% - 5.6% 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.

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

At least $7.25 an hour for a nanny in Vermont. Vermont has its own minimum wage of $14.42/hour, but it does not cover nannies, so the federal floor governs instead. 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: 21 V.S.A. § 383(2)(B).

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

No. Vermont does not let an employer require direct deposit, so your nanny has to opt in. Vermont requires that authorization in writing. Federal Regulation E sets the floor, and Vermont adds an employee-consent rule on top.

What records do I need to keep for a Vermont 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. Vermont 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

Vermont Nanny Tax Guide

Vermont has a progressive income tax. Its private-sector Family and Medical Leave Insurance program is voluntary rather than a required payroll contribution.

Vermont household employer quick facts

Applies in Vermont

State income tax withholding
State unemployment

Not in Vermont

Disability insurance
Paid family leave

Minimum Wage

$7.25/hour

That is the federal floor, because the state's own rate does not cover nannies.

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SUTA Rate Range

0.5% - 5.6%

New employers: 1% on the first $15,400 (2026). Vermont Department of Labor

Key things to know

Progressive state income tax (3.35% - 8.75%)
Voluntary family and medical leave insurance is available
Vermont's $14.42/hour minimum does not cover nannies. The federal $7.25/hour floor applies.
Personal exemption of $5,450

Vermont Employer Requirements

State Income Tax

Vermont uses progressive tax brackets: 3.35% to $45,400, 6.6% to $110,050, 7.6% to $229,550, and 8.75% above. Personal exemption is $5,450.

Paid Family and Medical Leave

Vermont's private-sector Family and Medical Leave Insurance program is voluntary. Employers or employees may purchase coverage, but there is no mandatory household-employer payroll contribution.

State Unemployment Insurance

Employers pay SUI tax on the first $15,400 of wages. New employer rate is 1.0%, with rates ranging from 0.5% to 5.6% based on experience.

Workers' Compensation

Vermont doesn't require workers' compensation for household employers, since service in or about a private dwelling is excluded unless the employer notifies the Commissioner that they want coverage. It's still worth considering: it protects your employee if they're injured at work, and protects you from potential liability.

Vermont household employer questions

What will it cost?

Wondering what you'll actually owe as a Vermont 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: Vermont tax agency, IRS Publication 926

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Vermont Nanny Tax Guide

Vermont household employer quick facts

Vermont Employer Requirements

State Income Tax

Paid Family and Medical Leave

State Unemployment Insurance

Workers' Compensation

Vermont household employer questions

What will it cost?

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