The 9 Best Nanny Payroll Services of 2021

Wondering how to pay your nanny? Nanny payroll software can calculate paychecks, withhold taxes, and help with end-of-year tax forms. Below, Business.org reviews the year’s best nanny payroll companies.
Best overall nanny payroll
SurePayroll
SurePayroll
Starting from
$49.99/mo.
  • Icon Pros  Dark
    Automatic payroll tax deduction
  • Icon Pros  Dark
    Automatic tax filing
  • Icon Pros  Dark
    Direct deposit
Most comprehensive
NannyChex
NannyChex
Starting from
$6.25/paycheck + $80.00/quarter
  • Icon Pros  Dark
    Automatic payroll tax calculation
  • Icon Pros  Dark
    Automatic tax filing (full-service plan only)
  • Icon Pros  Dark
    Direct deposit (full-service plan only)
Best for multiple employees
Savvy Nanny
Savvy Nanny Payroll Services
Starting from
$40.00/mo. + $50.00/yr.
  • Icon Pros  Dark
    Automatic payroll tax calculation
  • Icon Pros  Dark
    Automatic tax filing
  • Icon Pros  Dark
    Direct deposit
Best benefit add-ons
Paychex
Paychex
Starting from
$59.00/mo. + $4.00/employee
  • Icon Pros  Dark
    Automatic payroll tax calculation
  • Icon Pros  Dark
    Automatic tax filing
  • Icon Pros  Dark
    Direct deposit
Best DIY software
nanny pay logo
NannyPay
Starting from
$149.95/yr.
  • Icon Pros  Dark
    Automatic payroll tax calculation
  • Icon Cons  Dark
    No automatic tax filing
  • Icon Cons  Dark
    No direct deposit

Data as of 5/11/21. Offers and availability may vary by location and are subject to change.

The bottom line: Looking for an affordable, comprehensive nanny payroll service that takes everything off your plate? SurePayroll’s thorough automation is pretty hard to beat. There’s also NannyChex for fully featured plans, Savvy Nanny for supremely affordable solutions, Paychex for HR add-ons, and NannyPay for DIY-friendly households.

Best nanny payroll services of 2021

Best nanny payroll pricing

Brand
Starting base cost
Tax filing fees
Standout services
Learn more
SurePayrollSurePayroll
$49.99/mo.UnlistedTax filing guarantees, new hire reporting, mobile app
NannyChexNannyChex
$6.25 per weekly paycheck or $12.50 per biweekly paycheck$80.00/quarter + $150.00 for year-end tax prepComprehensive nanny payroll services, dedicated account representative
Savvy NannySavvy Nanny
$40.00/mo.$50.00 for year-end tax prepNo quarterly tax filing fee, up to 2 employees per plan
PaychexPaychex
$59.00/mo. + $4.00/employeeUnlisted Benefit add-ons, tax filing guarantee
NannyPay logoNannyPay
$149.95/yr.None Paycheck and pay stub printing, signature-ready Schedule H

Data as of 5/11/21. Offers and availability may vary by location and are subject to change.

SurePayroll: Best overall nanny payroll service

Best overall
SurePayroll
SurePayroll
  • Starting price: $49.99/mo.
  • Check
    Payroll tax automation
  • Check
    Tax penalty guarantee
  • Check
    Easy mobile access

Data as of 5/11/21. Offers and availability may vary by location and are subject to change.

If you don’t want to deal with any aspect of nanny payroll, from writing checks to remitting taxes, SurePayroll is hands-down the best choice. Its nanny payroll service is both comprehensive and fully automated: SurePayroll calculates, deducts, and files nanny taxes, then automatically pays your nanny via direct deposit. With SurePayroll’s auto-payroll feature, you don’t have to remember to pay your employee on time—the software does it automatically.

Best of all, SurePayroll plans include a tax filing guarantee. SurePayroll promises that the taxes it helps you calculate (or the taxes it files for you) are accurate. If they aren’t, SurePayroll deals with the IRS and pays all associated fines and fees.

And both SurePayroll plans include a tax filing guarantee: SurePayroll promises that the taxes it helps you calculate (or the taxes it files for you) are accurate. If they aren’t, SurePayroll deals with the IRS and pays all associated fines and fees.

Regardless of the plan you pick, you get these SurePayroll perks:

  • New hire state reporting
  • Automatic payroll payments and direct deposit
  • Employer-facing mobile app (for paying nannies on the go)
  • Solid US-based customer service support, including evenings and weekends

SurePayroll definitely has a few drawbacks. For one, it’s less comprehensive than providers who also offer employee benefits and workers compensation insurance. And it’s pricier than competitors like Savvy Nanny and NannyPay. But if you’re looking for secure, hands-off nanny payroll processing, SurePayroll's simple automation absolutely will hit the spot.

Strengths
Pro Bullet Full-service tax calculation and filing
Pro Bullet Automatic payroll runs
Pro Bullet Solid mobile app for on-the-go payroll
Weaknesses
Con Bullet Higher starting price than some competitors
Con Bullet Two-day payroll processing only

NannyChex: Most comprehensive

Most features
NannyChex
NannyChex
  • Starting price: $6.25/weekly paycheck + $80.00/quarter
  • Check
    Fully outsourced payroll service
  • Check
    Sick time and vacation tracking
  • Check
    Employer Identification Number setup

Data as of 5/11/21. Offers and availability may vary by location and are subject to change.

Along with payroll tax calculation and filing, NannyChex offers a host of services for household employers who want a totally hands-off nanny payroll experience:

  • New hire reporting
  • Employer Identification Number setup
  • Sick time, vacation time, and paid time off (PTO) tracking

Each NannyChex customer also gets a dedicated account specialist who knows your situation inside and out. They can answer any questions not just about taxes but about your taxes in particular.

NannyChex offers two payroll plans: a tax-only plan or a full-service plan. With the tax-only plan, NannyChex takes care of everything for you except directly paying your nanny—you'll write the check yourself. Full-service takes care of direct deposit, though you'll pay a fee for each paycheck deposited: $6.25 for weekly paychecks and $12.50 for bimonthly or monthly paychecks.

Since NannyChex handles every aspect of household employment, it costs a little more than pay-per-month software like SurePayroll. With the tax-only plan, you'll pay $125 for quarterly tax filing and $195 for year-end tax prep, which brings your total to $695 per year. The full-service plan charges less in tax filing fees ($80 per quarter plus $150 for year-end tax filing), but since you're paying for each deposited check, the yearly total is closer to $795. (In contrast, SurePayroll’s plan totals just under $600 a year.)

Strengths
Pro Bullet Comprehensive nanny payroll services
Pro Bullet Dedicated account specialist
Weaknesses
Con Bullet Pricier than self-service or DIY software options

Savvy Nanny: Best for 2+ employees

Best for multiple household employees
Savvy Nanny
Savvy Nanny
  • Starting price: $40.00/mo.
  • Check
    Affordable flat rate
  • Check
    Extended customer service hours
  • Check
    Plan includes two household employees

Data as of 5/11/21. Offers and availability may vary by location and are subject to change.

If you're paying two household employees to watch your kids, Savvy Nanny should be at the top of your list. Its $40-a-month plan lets you pay two employees and doesn't charge you extra for each paycheck deposited: the flat rate you see is exactly what you get. And if you have more than two employees, Savvy Nanny has your back there too. Each additional employee costs $6 extra per month and $5 extra at the end of the year.

Savvy Nanny also keeps things affordable by charging a one-time year-end tax filing fee of just $50. Compare that to NannyChex’s $80 fee per quarter and $150 fee for year-end filing and you can see why Savvy Nanny stands out. Subscribers can access live chat, phone, and email support six days a week.

For most users, Savvy Nanny’s services should be among the most affordable out there. Still, you’ll want to read through its list of potential fees, which can include fees for payroll reruns, insufficient funds charges, and document access after employee termination. Most providers charge extra for these services, though, not just Savvy Nanny. (In other words, Savvy Nanny doesn’t necessarily charge more. It’s just more transparent about extra fees than most.)

Strengths
Pro Bullet Affordable plan with $50 year-end filing fee
Pro Bullet Plans for paying up to two employees, plus a low fee for additional employees
Weaknesses
Con Bullet No EIN setup

Paychex: Best benefits add-ons

Most benefit options
Paychex
Paychex
  • Starting price: $59.00/mo. + $4.00/employee
  • Check
    Health benefits
  • Check
    Workers compensation insurance
  • Check
    Easy mobile access

Data as of 5/11/21. Offers and availability may vary by location and are subject to change.

Paychex offers everything you’d expect from a full-service nanny payroll provider, like calculating payroll taxes and paying your nanny automatically. But it stands out in one extremely crucial way. Unlike many nanny-specific payroll providers, Paychex offers optional benefit add-ons. You can use Paychex to offer competitive benefits like the following:

  • Employee health benefits (including medical, vision, and dental insurance plans)
  • Workers compensation insurance
  • 401(k) options

Bear in mind that since you’ll pay extra for these services, Paychex’s $59 a month is just a starting price. But that higher price gets you a host of other perks too. For instance, Paychex offers the absolute best payroll app for employers. If you spend a lot of time away from home (and your computer), Paychex simplifies on-the-go payroll better than any other provider. Paychex also has better customer service than cheaper competitors. You can contact the US-based customer service team 24/7, and Paychex’s HR experts are always on hand to answer benefits-related questions.

Strengths
Pro Bullet Comprehensive, competitive benefit add-ons
Pro Bullet Stand-out customer service
Weaknesses
Con Bullet More expensive than competitors, especially nanny payroll software
Tired of payroll? Gusto handles payroll taxes and more

With unlimited payroll runs and automatic tax filing, Gusto helps small-business owners worry less about payroll and put more time into growing their business.

  • Get automatic payroll tax filing, including end-of-year tax forms
  • Manage workers compensation insurance
  • Track paid time off, sick leave, and holiday pay

NannyPay: Best DIY software

Best do-it-yourself payroll
nanny pay logo
NannyPay
  • Starting price: $149.95/yr.
  • Check
    Check printing
  • Check
    Pay stub printing
  • Check
    Pre-filled year-end tax forms

Data as of 5/11/21. Offers and availability may vary by location and are subject to change.

NannyPay is a payroll software program that starts at just under $150 per year—an impossible price to beat.

If you’re wondering why it’s so cheap, well, NannyPay calculates taxes for you, but it can’t file them on your behalf. The same is true of employee paychecks. NannyPay will tell you how much to pay your employee, but it doesn’t include the same direct deposit features as SurePayroll, Paychex, and Nanny Chex.

While NannyPay is pretty basic, it takes care of a few payroll tasks beyond paycheck calculations. For instance, you can print checks and pay stubs, store and organize crucial tax documents, and print out pre-filled end-of-year tax forms.

Strengths
Pro Bullet Super affordable DIY software
Pro Bullet Desktop and cloud-based software options
Weaknesses
Con Bullet No automatic tax-filing features or guarantees

Still unsure which option to use?

Best nanny payroll software: Honorable mentions

If our top nanny payroll picks above don’t meet your needs, don’t worry. Here are four more of the year’s best payroll tax services for nanny employers (or employers of other household workers).

Compare top nanny payroll features: Runners-up

Brand
Starting base cost
Tax filing fees
Standout services
Learn more
Poppins PayrollPoppins Payroll
$45.00/mo.NoneEIN registration, bookkeeping records, PTO and sick leave tracking
Homework SolutionsHomeWork Solutions
$150.00/quarter$100.00 (year-end fee)Dedicated customer service representative
logo for homepay and care dot comHomePay
$75.00/mo.$100.00 (year-end fee)New hire reporting, PTO tracking, audit support
Simple NannySimple Nanny Payroll
$29.00/yr.N/ANanny tax calculations

Data as of 5/11/21. Offers and availability may vary by location and are subject to change.

Poppins Payroll: Most user-friendly

Most user-friendly
Poppins Payroll
Poppins Payroll
  • Starting price: $45.00/mo.
  • Check
    Low prices
  • Check
    Extensive bookkeeping
  • Check
    Ultimate user-friendliness

Data as of 5/11/21. Offers and availability may vary by location and are subject to change.

If you were hoping at least one nanny payroll service provider locked down a Mary Poppins reference, Poppins Payroll is absolutely here for you. At $45 a month, Poppins Payroll will take on just about every payroll task you need, from Employer Identification Number registration to new-hire paperwork filing. The service files taxes for you, stores records, and even helps with bookkeeping. Most notably, it doesn't charge extra for quarterly or year-end tax filing.

Unfortunately, for now Poppins Payroll is available in only 11 states and the District of Columbia. Poppins Payroll is planning to expand nationwide, though—hopefully, the other 39 states will benefit from its stellar service, adorable website, and super low cost sooner rather than later.

HomeWork Solutions: Best dedicated assistance

Best assistance
Homework Solutions
HomeWork Solutions
  • Starting price: $225.00/quarter
  • Check
    Dedicated account representative
  • Check
    Payroll tax return preparation
  • Check
    Payroll recordkeeping

Data as of 5/11/21. Offers and availability may vary by location and are subject to change.

HomeWork Solutions’ full-service plan includes a dedicated account representative, comprehensive household employee tax filing, tax document storage, and employee pay stub access. But at $225 a quarter ($900 for the year), HomeWork Solutions is on the pricier end of the nanny payroll spectrum.

The streamlined Essential Payroll plan costs a more affordable $150 a quarter (or $600 a year, closer to SurePayroll’s nanny payroll plan). This plan cuts out a few benefits, like tracking leave accrual, but it still includes key features like document storage that simplify end-of-year tax filing for busy employers.

HomePay: Best HR support

Best HR assistance
logo for homepay and care dot com
HomePay
  • Starting price: $75.00/mo.
  • Check
    Legal compliance
  • Check
    HR assistance
  • Check
    Budgeting feature

Data as of 5/11/21. Offers and availability may vary by location and are subject to change.

Care.com’s HomePay might be the most comprehensive payroll solution on our list. Along with calculating and filing taxes, the company offers HR assistance that keeps you in compliance with nanny payroll laws. Its budgeting feature makes it easy to figure out what you can afford nanny-wise while maximizing your tax return benefits, and its resource guides can help you decide what to pay your nanny and what benefits to offer.

HomePay also recently changed its pricing to $75 a month (billed quarterly). That doesn’t include a setup fee, but year-end tax preparation costs an additional $100, which brings your annual total to around $1,000.

Simple Nanny Payroll: Best calculator-only

Best calculator
Simple Nanny
Simple Nanny Payroll
  • Starting price: $29.00/yr.
  • Check
    Payroll tax calculation
  • Check
    Affordable calculator
  • Check
    Customer Service

Data as of 5/11/21. Offers and availability may vary by location and are subject to change.

Simple Nanny Payroll isn’t a full-service payroll option. Instead, it’s a DIY service that lets you calculate nanny payroll taxes and reach out to customer service for tax resources if you run into trouble. The payroll calculator is pretty handy, and the service costs only $29 for a full year. Simple Nanny Payroll isn’t too fancy, but it’s definitely a step above a spreadsheet. If you’re on a pretty limited budget and want to make sure you’re calculating taxes correctly, it’s a solid choice.

Nanny payroll service FAQ

What is the nanny tax?

The nanny tax is an umbrella term for the taxes you must withhold from your nanny’s paycheck and the employee tax contributions you need to match:

  • FICA taxes, or the Social Security and Medicare taxes that both you and your employee pay
  • FUTA taxes, or the federal unemployment insurance tax that only you pay, not your employee

How much are nanny taxes?

For the 2021 tax season, the Social Security tax is 6.2% of each paycheck and the Medicare tax is 1.45% of each paycheck. If you pay your employee $2,300 or more per year, you’re required to withhold that amount from your employees’ wages to file with the federal government. You’ll also need to match your employees’ contribution out of your own pocket.

In contrast, only employers pay FUTA taxes. Luckily, the tax itself isn’t too expensive: the FUTA tax rate is just 6% of an employee’s first $7,000 of wages. In other words, employers never pay more than $420 in FUTA taxes per employee. You’ll only pay the tax if your employee makes more than $1,000 per quarter.

Note that you are not required to withhold your nanny’s income tax, including both the state and federal tax, unless your household employee directly requests that you do so. The IRS also lists some exceptions to nanny taxes, so before you start filing taxes, you might want to give their list a read-through.

Best Small Business Payroll Software
Gusto
Best overall
ADP
Best HR add-ons
Paychex
Best reporting
OnPay
Simplest setup
SurePayroll
Best customer service
Learn more about our top brands.

Do I need an EIN to pay my nanny?

Yes, you need an Employer Identification Number (EIN) for household payroll. To get an EIN, apply for one from the IRS—the application doesn’t cost anything and is fairly painless. Plus, if you apply online (the IRS’s preferred method, though you can also apply via mail or fax), you get your EIN immediately, which means your nanny will be able to start working for you right away.

(And, for the record, it’s always worth paying your nanny on the books. If you’re thinking of not applying for an EIN, reconsider—paying your nanny under the table is against the law.)

What is the best nanny payroll service?

SurePayroll is our favorite nanny payroll service. It’s one of the only payroll providers with a solid mobile app, which makes it both flexible and versatile. The software automates as many aspects of nanny payroll as possible, including direct deposit and tax remittance. It also costs $49.99 per month, which puts it on the cheaper end of full-service payroll.

However, the best nanny payroll service for you depends largely on what you need. Do you want to provide comprehensive benefits to your household employee? Paychex might be a better nanny tax service for you than SurePayroll. Are you comfortable handling most aspects of nanny payroll yourself? Simple Nanny Payroll could be the bare-bones solution you’re looking for.

Can I pay my nanny through my small business?

No, you cannot run household employee payroll through your small business. If you become a household employer, the federal government requires you to obtain a new Employer Identification Number. Making small-business tax deductions based on a household employee’s salary is against the law and can result in hefty fines—it’s not worth the risk.

What are the best and worst states for working parents?

While hiring a nanny can certainly be a big help, most working parents still want to maximize the amount of time they’re able to spend with their kids.

To do that, you need a positive combination of circumstances: family-friendly legislation that allows you to take time off when you need it and an income that can actually cover the cost of your housing. In this time of pandemic, it’s also really important to find an area with a stable job market with a low unemployment rate.

A lot of those factors depend heavily on where you live, so we took a look at the data to find out which states offer the best (and worst) environments for working parents.

Working Parents map

Key Findings

  • The District of Columbia is the most working parent–friendly area in the nation. D.C. offers all the job protections and family leave available in the U.S., meaning parents can usually take advantage of paid leave for medical reasons, maternity time, and paternity time. D.C. also has the lowest rent-to-income ratio in the country, meaning parents (theoretically) don’t have to spend as much time working in order to cover their housing costs—though we should note that this number may be skewed since most of the people making high incomes in the D.C. area don’t actually live in the low-cost neighborhoods within the District of Columbia.
  • Nevada is ranked last for working parents. In addition to having a high cost of living and high unemployment rates, Nevada also doesn’t offer any legal benefits for parents other than the basic FMLA requirements.
  • All three west coast states made it into the top 20 states for working parents. California and Washington both grant full legal protections for parents, while Oregon has a solid income-to-rent ratio and low unemployment.

The rankings

Rank
State
Rent as a percentage of household income
2019-2020 unemployment rate change
Paid family leave
Paid medical leave
Job-protected leave
1District of Columbia27.1%+3.4%Icon Checked Box  DarkIcon Checked Box  DarkIcon Checked Box  Dark
2Washington29%+3.7%Icon Checked Box  DarkIcon Checked Box  DarkIcon Checked Box  Dark
3New Jersey 29.6%+3.1%Icon Checked Box  DarkIcon Checked Box  DarkIcon Checked Box  Dark
4Iowa26.5%+1.9%Icon Cons  DarkIcon Cons  DarkIcon Checked Box  Dark
5New York 30.1%+5.8%Icon Checked Box  DarkIcon Checked Box  DarkIcon Checked Box  Dark
6Massachusetts29.5%+6.8%Icon Checked Box  DarkIcon Checked Box  DarkIcon Checked Box  Dark
7Rhode Island 29.5%+7%Icon Checked Box  DarkIcon Checked Box  DarkIcon Checked Box  Dark
8Montana27.9%+1.8%Icon Cons  DarkIcon Cons  DarkIcon Checked Box  Dark
9Minnesota27.6%+2.8%Icon Cons  DarkIcon Cons  DarkIcon Checked Box  Dark
10Maine28.1%+3.2%Icon Cons  DarkIcon Cons  DarkIcon Checked Box  Dark
11California31.7%+7.1%Icon Checked Box  DarkIcon Checked Box  DarkIcon Checked Box  Dark
12Wisconsin26.8%+2.0%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
13New Hampshire28.9%+3.4%Icon Cons  DarkIcon Cons  DarkIcon Checked Box  Dark
14North Dakota24.1%+2.0%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
15South Dakota25.2%+0.7%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
16Nebraska26.3%+0.5%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
17Connecticut29.6%+4.1%Icon Cons  DarkIcon Cons  DarkIcon Checked Box  Dark
18Oregon29.4%+4.5%Icon Cons  DarkIcon Cons  DarkIcon Checked Box  Dark
19Louisiana31.2%+3.0%Icon Cons  DarkIcon Cons  DarkIcon Checked Box  Dark
20Kentucky 27%+1.3%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
21Alaska27.6%+1.0%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
22Kansas26.4%+2.8%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
23Missouri27.5+1.6%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
24Oklahoma27.2%+2.0%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
25Wyoming27.3%+2.4%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
26Utah27.7%+2.5%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
27Maryland29.9%+3.7%Icon Cons  DarkIcon Cons  DarkIcon Checked Box  Dark
28Arkansas27.2%+3.7%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
29Arizona28.6%+2.1%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
30Mississippi29.2%+1.5%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
31Indiana28.1%+3.0%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
32Vermont32%+1.8%Icon Cons  DarkIcon Cons  DarkIcon Checked Box  Dark
33Idaho28%+3.2%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
34Ohio27.2%+4.3%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
35Tennessee28.5%+3.0%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
36West Virginia28.2%+3.6%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
37Virginia28.3%+3.5%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
38South Carolina29%+2.7%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
39North Carolina28.4%+3.6%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
40Pennsylvania28.6%+3.5%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
41Alabama28.7%+3.9%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
42Georgia 29.3%+3.2%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
43New Mexico28.4%+4.6%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
44Hawaii32%+12.4%Icon Cons  DarkIcon Checked Box  DarkIcon Checked Box  Dark
45Michigan 29%+4.6%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
46Texas29.2%+4.8%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
47Colorado 30%+3.8%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
48Delaware29.7%+4.3%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
49Illinois28.1%+6.5%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
50Florida33.1%+4.7%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark
51Nevada30.5%+8.9%Icon Cons  DarkIcon Cons  DarkIcon Cons  Dark

Our methodology

To find out which states were best for working parents, we used data that might indicate parents in the area had more free time to spend with their children. Specifically, we looked for states that offered family-friendly legal protections, including paid family leave (paid maternity and paternity leave), paid medical leave, and various types of job-protected leave.

We also wanted to know which states offered the best ratio of income to housing costs (according to the U.S. Census Bureau), since a parent with a high income-to-rent ratio might not have to work as many hours to cover their family’s basic needs. We also looked at job stability during the coronavirus pandemic by examining the state’s change in unemployment rate over the past year (according to the Bureau of Labor Statistics).

We then weighted those numbers to prioritize the most important factors, using the most recent data available:'

  • Gross rent as a percentage of household income (2019): 30%
  • Unemployment rate change (Sept. 2019–Sept. 2020): 30%
  • Paid family leave: 10%
  • Paid medical leave: 10%
  • Job-protected leave (lower employer size threshold): 10%
  • Job-protected leave (lower employee tenure/hours worked requirement): 10%

We also wanted to note that since lower income-to-rent ratios and unemployment rates are preferable, states with the lowest numbers in these categories were scored higher.

The takeaway

With the right nanny payroll service, your household hiring decision really can make life easier. Once you take taxes off the table, you can focus on your babysitter or nanny’s work, benefits, and happiness—and on enjoying the tax-free time your nanny tax software opens up for you.

Want help budgeting for your new household employee payroll service? Read our reviews of the year’s best personal finance budgeting tools.

Methodology

We used the following criteria to rank our top nanny payroll picks:

  • Pricing, including year-end tax filing fees, registration fees, and monthly or quarterly costs
  • Customer service, including live chat options, hours of availability, email response times, and customer service ratings
  • Hands-off automation, including options for automated payroll tax filing, end-of-year taxes, and payroll runs
  • User-friendliness, including website accessibility, ease of use, mobile apps, and employee access portals
  • Additional perks, including workers compensation and 401(k) options
  • Tax services, including year-end tax filing guarantees, audit assistance, and tax filing help

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

Kylie McQuarrie
Written by
Kylie McQuarrie
Kylie is an accounting writer for Business.org. Kylie spent two of the last four years writing for and with small-business owners—from dentists in Australia to plumbers in the Midwest. She spent the other two writing in depth about internet and security. She’s passionate about reading, hiking, and dedicating every spare second to writing for fun (at lunch, between meetings, on the train, before breakfast . . . ). Her content helps small-business owners tackle the logistics of running a business so they can focus more on their passions too.
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