Payroll setup checklist

Paying a caregiver directly can make you a household employer. This checklist walks the setup step by step. Many families hand most of it to a payroll service, this shows you what that covers.

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Before the first paycheck

Confirm your caregiver is an employee, not a contractor (most in-home caregivers are)

Apply for a free federal EIN (Employer Identification Number) at IRS.gov

Have the caregiver complete Form W-4 (tax withholding) and Form I-9 (work eligibility)

Check your state's new-hire reporting requirement

Decide: run payroll yourself, or use a household-payroll service

Agree on wage, schedule, and pay method in a work agreement

Every pay period

Track hours worked, including any overtime over 40 in a week

Withhold the employee's income and Social Security / Medicare (FICA) taxes

Pay on the agreed schedule, and give a simple pay stub

Keep a record of hours, pay, and taxes for each period

Ongoing and year-end

Pay your employer taxes (your FICA match, federal and state unemployment)

Check whether your state requires workers' compensation insurance

Provide the caregiver a W-2 by January 31, and file with the SSA

Keep all payroll records for at least four years

This is general information, not tax or legal advice. Thresholds and rules change and vary by state. A payroll service or a tax professional can set most of this up for you and keep it correct.

Rather not do this alone?

Many families use a household-payroll service so taxes and filings are handled for them.

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