Question 1

What should a nanny contract include?

Accepted Answer

A comprehensive nanny contract should cover the nanny's work schedule (days, hours, start and end times), the children's names and ages, specific childcare duties (bathing, feeding, school pickup/dropoff, homework help, activity transportation, meal preparation for children), household duties expected beyond childcare (if any — children's laundry, tidying play areas, loading the dishwasher after children's meals), compensation (hourly rate or weekly salary, overtime rate, how hours are tracked), payroll and tax arrangements (the family's obligation to withhold and pay nanny taxes), paid time off (vacation days, sick days, personal days, holidays), health insurance and other benefits, confidentiality provisions regarding the family's private life, house rules (screen time limits, discipline philosophy, food restrictions, visitor policies), vehicle use and transportation policies, overnight or travel expectations, the trial period and its terms, termination provisions including severance, and notice requirements from both parties.

Question 2

Is a nanny an employee or an independent contractor?

Accepted Answer

In the vast majority of cases, a nanny is a household employee — not an independent contractor. The IRS and state labor agencies are clear on this point: if the family controls when, where, and how the nanny performs the work (setting the schedule, directing the childcare approach, providing the workspace), the nanny is an employee regardless of what the contract calls them. This classification triggers significant legal obligations for the family: withholding and paying federal income tax, Social Security tax (6.2%), and Medicare tax (1.45%) from the nanny's wages; paying the employer's matching share of Social Security and Medicare; paying federal unemployment tax (FUTA); paying state unemployment insurance; and filing Schedule H with the family's federal tax return. Families who treat their nanny as an independent contractor to avoid these obligations risk back-tax liability, penalties, interest, and denial of the Child and Dependent Care Tax Credit.

Question 3

What are nanny taxes and how do they work?

Accepted Answer

The 'nanny tax' refers to the federal and state employment taxes that families must pay when they hire a household employee (nanny, housekeeper, senior caregiver) and pay them more than a threshold amount in a calendar year — $2,700 in 2024. Once this threshold is met, the family must: obtain an Employer Identification Number (EIN) from the IRS; withhold the employee's share of Social Security (6.2%) and Medicare (1.45%) from each paycheck; pay the employer's matching share of Social Security and Medicare; withhold federal income tax if the nanny requests it (using Form W-4); pay federal unemployment tax (FUTA) of 6% on the first $7,000 of wages (reduced to 0.6% with state unemployment credit); pay state unemployment insurance (rates vary by state); file Schedule H (Household Employment Taxes) with the family's annual tax return; and provide the nanny with Form W-2 by January 31 of the following year.

Question 4

How should overtime work in a nanny contract?

Accepted Answer

Nannies are covered by the Fair Labor Standards Act (FLSA) and are entitled to overtime pay — time and a half (1.5x the regular hourly rate) for all hours worked over 40 in a workweek. This applies regardless of whether the nanny is paid hourly or on a salary basis. For salaried nannies, the family must calculate an effective hourly rate by dividing the weekly salary by the number of hours the salary is intended to cover, then pay 1.5x that rate for hours over 40. Live-in nannies have different overtime rules that vary by state — some states (California, New York) require overtime for live-in domestic workers, while others follow the FLSA exemption that excludes live-in domestic employees from overtime requirements. The contract should specify the nanny's regular hourly rate, the expected weekly hours, the overtime rate, how overtime is tracked and approved, and whether the family uses a daily or weekly overtime threshold (some states, like California, require daily overtime after 9 hours).

Question 5

What paid time off should a nanny contract provide?

Accepted Answer

While there is no federal law requiring paid time off for nannies, industry standards and competitive hiring practices dictate generous PTO policies. Standard nanny PTO includes: paid vacation (typically 5-10 days per year, with many families offering two weeks), paid sick days (typically 3-5 days per year — note that many states and cities now mandate paid sick leave for all employees), paid holidays (typically 6-8 major holidays — New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, Christmas, plus one or two additional holidays), and paid personal days (typically 1-3 days per year). The contract should specify whether unused PTO carries over to the next year or is forfeited, whether the nanny is paid for family vacations when the family does not need the nanny (the industry standard is yes — the nanny should be paid for their regular schedule during family vacations), and how PTO is accrued for nannies who start mid-year.

Question 6

How should a nanny contract handle confidentiality?

Accepted Answer

Confidentiality is a critical and often underappreciated element of the nanny-family relationship. The nanny has intimate access to the family's private life — their home, their finances (through observing spending habits and lifestyle), their relationships, their children's behavioral and medical information, and potentially sensitive personal and professional details. The contract should include a confidentiality clause that prohibits the nanny from disclosing family information to third parties (friends, other nanny employers, social media), restricts the nanny from posting photographs of the children on social media without express written permission, protects the family's address, alarm codes, and security information, survives the termination of the employment relationship (meaning the confidentiality obligation continues after the nanny leaves), and specifies consequences for violation (termination for cause, forfeiture of severance).

Question 7

What is a nanny trial period and how should it work?

Accepted Answer

A trial period (also called a probationary period) allows both the family and the nanny to evaluate the fit before fully committing to the arrangement. A typical nanny trial period lasts 2-4 weeks, during which either party can end the arrangement with minimal notice (usually 1 week or immediate). The contract should specify: the length of the trial period, the notice required for termination during the trial (shorter than the standard termination notice), whether the nanny receives full compensation and benefits during the trial, whether the trial period is paid at a different rate (it should not be — pay the agreed rate from day one), and what happens at the end of the trial (automatic transition to regular employment if neither party gives notice, or a formal review meeting to confirm continuation). The trial period should be documented in the contract from the start, not added verbally.

Question 8

How should termination and severance work in a nanny contract?

Accepted Answer

Termination provisions are among the most important clauses in a nanny contract because losing childcare has an immediate and significant impact on the family, and losing employment has an immediate impact on the nanny. The contract should include: notice requirements (typically 2-4 weeks from either party for termination without cause), severance pay (typically 1-2 weeks of pay for each year of service, triggered only by termination without cause — not by the nanny's voluntary resignation), grounds for immediate termination without severance (dishonesty, substance abuse, child endangerment, criminal conduct, gross negligence), the nanny's obligation to return all family property (keys, credit cards, car seats, electronics), the family's obligation to provide final pay (including accrued unused PTO) by the deadline required under state law, and a mutual non-disparagement clause to protect both parties' reputations in the childcare community.

Question 9

Should a nanny contract address vehicle use?

Accepted Answer

Yes — vehicle use is a major liability issue in nanny arrangements. If the nanny drives the children, the contract should specify: whether the nanny uses the family's car or their own vehicle, the family's insurance coverage for the nanny as an authorized driver on the family's policy (most auto policies cover permissive users, but the family should confirm with their insurer and add the nanny as a named driver if required), the nanny's obligation to maintain a valid driver's license and clean driving record, mileage reimbursement if the nanny uses their own car (the IRS standard mileage rate is commonly used), restrictions on vehicle use (children only, no personal errands in the family car), and car-seat requirements and safety protocols. The family's auto insurance should be reviewed to ensure adequate liability coverage, as accidents involving the children are the highest-liability risk in a nanny arrangement.

Question 10

What happens if the nanny is sick or needs time off on short notice?

Accepted Answer

The contract should address both planned absences (vacation, personal days) and unplanned absences (illness, family emergencies). For unplanned absences, the contract should specify: how much advance notice the nanny should provide (as much as possible, but recognizing that illness can be sudden), whether the absence is paid or unpaid (sick days should be paid if available; absences beyond the sick-day allotment may be unpaid), the family's backup-care plan (a designated backup caregiver, a backup-care agency, or a family member), and whether the nanny is required to help the family find a substitute (this is not standard — most families handle backup care themselves). For families who depend entirely on the nanny for childcare, building a backup plan into the contract is essential to avoid crisis situations when the nanny calls in sick on a workday morning.

Component	Purpose	Key Details
Schedule & Hours	Sets regular work pattern	Days, hours, overtime tracking, flexibility
Childcare Duties	Defines primary responsibilities	Feeding, bathing, transport, activities, homework
Household Duties	Limits non-childcare work	Children's laundry, tidying, meal prep boundaries
Compensation	Sets pay and tax obligations	Gross salary, overtime rate, payroll taxes, pay schedule
PTO & Benefits	Defines leave and perks	Vacation, sick days, holidays, health insurance
House Rules	Sets behavioral expectations	Screen time, discipline, food, visitors, phone use
Confidentiality	Protects family privacy	Social media, family information, photo restrictions
Termination	Defines exit terms	Notice period, severance, for-cause triggers

Free Nanny Contract Forms

What Is a Nanny Contract?

Family-First Terms

Tax Compliant

Legal Protection

Nanny Contract Form Preview

Nanny Employment Agreement

Key Components of a Nanny Contract

How to Create a Nanny Contract

Define the Schedule and Childcare Duties

Set Compensation, Taxes, and Benefits

Establish House Rules and Boundaries

Address Vehicle Use and Confidentiality

Add Termination, Trial Period, and Legal Terms

Frequently Asked Questions

Official Resources

Ready to Create Your Nanny Contract?