Do I Really Need to Pay Taxes for a Summer Nanny?

Psst… summer is coming! That means it’s time to finalize your plans — vacations, camps, and, for some lucky families, hiring a summer nanny.

A nanny can be a game-changer for summer sanity. But there’s one pesky question that tends to come up:

Do I really have to pay the “nanny tax” for a short-term summer hire?

It doesn’t feel so fun-in-the-sun now does it?

Here’s the scoop — both the good news and the not-so-good news.

The Not-So-Good News:

Yes, in most cases, you are legally required to pay employment taxes, even for a nanny who works only during the summer.

According to IRS Publication 926, if you pay a nanny over $1,000 in a calendar quarter (or more than $2,800 in a year), the IRS considers them a household employee — and you must comply with tax rules, including withholding and paying Social Security, Medicare, and Unemployment Insurance.

There are a few exceptions:

  • You’re hiring your spouse, parent, or your child under age 21
  • The nanny is under 18 and not working primarily in childcare
  • You’re hiring through an agency that employs and pays the nanny directly

Otherwise, yes — you’ll need to handle the tax side. And it really doesn’t take long to hit that $1,000 threshold in a single quarter.

The Temptation to Pay “Under the Table”

We get it. It’s a short-term gig. You might think, Why not just keep it simple and skip the taxes?

Here’s why that’s risky: summer employees can be unpredictable. Let’s say your nanny leaves after a few weeks and later files for unemployment. They’ll list you as a recent employer, and the state will notice that you didn’t pay into Unemployment Insurance. That can quickly draw attention from state or federal tax authorities — and potentially lead to penalties, interest, and a major headache.

Long story short: skipping taxes isn’t worth the risk — even for a short-term hire.

The Good News: We Make It Easy

At Savvy Nanny Payroll Services, we specialize in making nanny payroll stress-free — even for short-term summer situations.

Here’s how we help:

  • Guided setup for your federal EIN (it’s quicker than you’d think!)
  • Guided setup for your state for tax accounts (easier than you’d think in most states)
  • Simple payroll processing with just a few clicks each pay period
  • Competitive pricing: Just $39/month for summer 2025 — often lower than other premium household payroll services.
  • Easy online cancellation when summer ends — no phone calls or long-term contracts
  • Year-end tax forms (W-2 and Schedule H). Like most other payroll services, we need to charge for year-end forms. At $50, it’s a good, competitive rate. Unlike many of our competitors, we don’t charge you the full monthly rate all the way until January to get those year-end forms.  When summer ends, cancel our service yet stay active in our system, ready for year-end filing for only $9.99/month. And if you somehow don’t need those year-end forms from us, cancel fully and you pay nothing further.

Rest easy this summer knowing your nanny payroll is handled the right way — quickly, legally, and affordably.

📧 Have questions? Reach out anytime at support@savvynannypayrollservices.com
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