Do You Need to Create a Nanny Pay Stub?

Yes, you should create a nanny pay stub for your nanny. This is not just a good rule of thumb. In many states, the law requires employers to give pay stubs to employees. And that includes household employees like nannies.

Maybe you just hired your first nanny, or you need to know how to create a nanny pay stub. You need this to stay on the right side of the law and maintain a good relationship with your employee.

In this guide, you’ll find out what a nanny pay stub is, including why it’s important, and how to create one. A paystub generator makes it easy to create a nanny paystub and maintain clean records for your household payroll.

What Is a Nanny Pay Stub?

A nanny pay stub is a document that contains the full details of what your nanny earned and the deductions in each pay period. It will show the number of hours worked and the gross and net pay. So, your nanny can see their pay before anything is deducted and the final amount that gets to their bank account. It also shows all the taxes, such as Social Security taxes and Medicare taxes.

You can think of it as the proof of income for your household employee. This document can help both you and your nanny keep track of payments and deductions throughout the year.

Read More: Why You Should Create Pay Stubs for Employees

Does a Household Employee Need Pay Stubs?

Yes, household employees, like nannies, need pay stubs for a number of reasons. Firstly, many states make it a must for employers to give their employees pay stubs. And some states extend that to include domestic workers. The regulations vary depending on the state. Some require that the pay stub be a physical copy, while others allow digital or electronic copies.

Now, your state may not make it compulsory, but you should still give your nanny pay stubs. This will protect both you and your nanny in case of any wage or deduction misunderstandings. Your nanny may also need a stub for rent applications, credit checks, or to file taxes. 

Check out: Create employee pay stubs easily with ready-made templates

What Information Goes on a Nanny Pay Stub Template?

All the necessary information should be on a nanny pay stub template to make it clear. The information includes:

1. Household Employer and Employee Details

As the employer, a section needs to have your details. That includes your complete name and address with your Employer Identification Number, where necessary. For the employee section, you provide the full name and address of your nanny. You also provide the last four digits of the Social Security number.

2. Pay Period

Any pay stub should clearly show the pay period that it covers. It should show the start date, end date and the date of payment. Then, the pay stub should state the number of hours worked in that pay period. This information is necessary when calculating regular and overtime wages.

3. Employee Wages or Earnings

The earnings section now breaks down the hourly rate or pay and the total gross pay without any deductions. It also shows the overtime hours and the overtime pay, as well as the year-to-date earnings. 

4. Deductions

Deduction is a very important element of any pay stub. For example, Social Security taxes amount to 6.2 % of gross wages, while Medicare taxes 1.45% of gross wages. If your nanny asks you to withhold federal income tax, which goes to the IRS, that’s a separate item.

There are also state and local taxes, which can vary depending on where you live. So, the pay stub can include state unemployment insurance contributions or state unemployment tax. This can reflect on the stub even if they are employer-paid taxes. Other applicable deductions can also be included on the stub.

5. Net Pay

The net pay section shows the sum of money paid to your nanny after all the deductions. So, this is the actual amount the nanny gets. Here, the method of payment should be stated. This can be by direct deposit to their bank account or a physical paycheck. You can also use any other method that both you and your nanny agree upon.

Also Read: Identifying Common Pay Stub Mistakes and Correcting Payroll Errors

How To Create Pay Stubs for Your Nanny

Here is a step-by-step guide to creating pay stubs for your nanny legally:

Step 1: Gather Required Information

Begin to gather all the necessary information you need, such as your EIN and employee details. You also need to note the pay period dates, hours worked and the rates that are applicable in your state. Track the time every week so you can have accurate numbers for your calculations. 

Step 2: Calculate Hours Worked and Gross Pay

The next step is to look at your records and sum up the number of hours worked. Then, multiply the hours worked by the hourly rate to get the total gross pay. Add overtime pay if your nanny had to work more than 40 hours during a week. Be careful and ensure you get the correct amount because you need this gross pay for other calculations.

Step 3: Calculate Taxes and Deductions

Now, you calculate the taxes and deductions according to the current tax rates. An employee pays 6.2% of gross wages as Social Security taxes. However, don’t forget that you, as the employer, also contribute the same amount. Medicare tax is 1.45% of gross wages, and the employer matches this, too. 

If your employee wants you to withhold federal income tax, then that applies too. State taxes, such as state unemployment tax, usually depend on where you live.

Step 4: Get the Net Pay

Subtract all the deductions from the total gross pay to get the net pay. This is the actual amount that you pay your nanny. Depending on what you agreed on, you can pay through direct deposit or give them a check.

Step 5: Generate the Pay Stub

Create the pay stub with a professional pay stub generator. A tool like this can provide you with digital pay stubs with all the necessary information. Also, it ensures you have accurate pay stubs every pay period. It also helps you maintain proper household payroll records.

Step 6: Provide Digital Pay Stubs or Physical Copies

Give your nanny the finished digital or physical pay stub on or before the payday. You may need to give them physical copies if your state makes that mandatory. Keep some copies in your own records so you can use them in preparing year-end tax forms and tax filing. If your documents are organized, you can save time when it’s time for annual reporting.

Further Reading: What You Should Know To Generate Pay Stubs for Employees

Nanny Payroll Services vs. DIY Pay Stubs for Household Payroll

Household employers have two primary options when they want to manage household payroll:

Nanny Payroll Services

These are professional payroll service providers that can handle calculations for you. They handle the whole process and create pay stubs that are compliant with state requirements. However, these services are usually expensive, as some charge a monthly fee. This fee often ranges from tens of dollars a month, depending on their features. They help save time as well as reduce errors in managing the payroll process.

DIY Pay Stubs

You can create your own pay stubs with a pay stub template or an online pay stub generator. This is much cheaper, but you need to know the tax rates, provide accurate information and stay up to date with new regulations.

For smaller businesses or families that have only one employee, the middle ground is online pay stub generators. They can help you with automated payroll calculations at a lower price than full nanny payroll services.

Check Out: Generate household employee pay stubs easily with our reliable online pay stub generator.

To Sum It Up

Now you know why a nanny pay stub is important for both you and your household employee. You may choose to use a nanny payroll service or manage the process yourself. Either way, the correct documentation protects all parties involved.

Now that you know better, you want to create professional pay stubs for your nanny. That’s where we come in. Our stub generator will help you create the right and compliant documentation in minutes. Let’s help you get your household payroll in order today.