Nanny Taxes Basics for NC Families (Charlotte): What Parents Need to Know Before Hiring

Hiring a nanny in Charlotte is an incredible investment in your family — personalized care, consistency for your children, and support that fits your schedule. But once you move past the excitement of finding the right nanny, many families hit the same pause point:

“Wait… what about taxes?”

If the words household employer, payroll, or tax forms make your head spin, you’re not alone. Most families we work with have never hired a household employee before — and nanny taxes feel overwhelming at first.

The good news?
They’re very manageable once you understand the basics.

This guide walks North Carolina families through nanny taxes 101, what’s required, what’s optional, and how to stay compliant without the stress.

First Things First: Is a Nanny a Household Employee?

In almost all cases, yes.

If you:

• Set your nanny’s schedule
• Decide how the work is done
• Pay them directly (hourly or salaried)

Then the IRS and the state of North Carolina consider you a household employer, and your nanny is a W-2 employee, not a 1099 contractor.

This applies whether your nanny is full-time, part-time, or after-school.

If you’re just beginning the process, you can see how this fits into the overall placement journey on our How It Works for Families page:
https://www.gadreamnannies.com/families-how-it-works/

What Are “Nanny Taxes,” Exactly?

“Nanny taxes” is a catch-all term for the taxes and filings families are responsible for when they legally employ a nanny.

In North Carolina, this typically includes:

Federal Taxes

• Social Security & Medicare (FICA)
  You pay 7.65%, and your nanny pays 7.65%
• Federal Unemployment Tax (FUTA)
  Usually 0.6% on the first $7,000 of wages

North Carolina State Taxes

• NC State Unemployment Insurance (SUI)
• NC State Income Tax Withholding (optional but strongly recommended)

Even if your nanny prefers not to have taxes withheld, employer tax obligations still apply.

How Much Do Nanny Taxes Typically Cost Charlotte Families?

One of the most common questions we hear is:
“Is this going to be way more expensive than I expected?”

In reality, employer taxes usually add about 8–10% on top of your nanny’s gross pay.

For example:

• Nanny earns $25/hour
• Employer taxes may add roughly $2–$2.50/hour

Most families find this very reasonable for:

• Legal compliance
• Peace of mind
• Long-term stability with their nanny

Do I Have to Handle Payroll Myself?

No — and most families don’t.

While it is possible to manage payroll and filings on your own, many Charlotte families choose a household payroll service to:

• Calculate taxes correctly
• Withhold and remit payments
• File quarterly and annual forms
• Issue W-2s and pay stubs

Using payroll support removes guesswork and significantly reduces errors.

We’re always happy to recommend reputable payroll providers that specialize specifically in household employees. Many of our clients have used GTM for payroll help and questions and have had great success.

Required Forms for NC Household Employers

Here’s a simplified overview of what’s typically required (most payroll services handle these for you):

• Form W-4 (completed by your nanny)
• Form I-9 (employment eligibility verification)
• Forms W-2 and W-3 (annual wage reporting)
• Schedule H (filed with your personal tax return)
• North Carolina New Hire Reporting

It may sound intimidating at first, but once your system is set up, everything runs smoothly in the background.

What Happens If Nanny Taxes Aren’t Done Correctly?

We focus on education, not fear — but it’s important to understand the risks.

Paying a nanny “under the table” can lead to:

• IRS penalties and back taxes
• Issues if your nanny files for unemployment
• Problems in the event of a workplace injury
• Loss of eligibility for childcare tax benefits

Most importantly, it can erode trust with an otherwise wonderful nanny.

Families who handle payroll correctly from the beginning almost always say:
“I’m so glad we did this the right way.”

Are There Any Tax Benefits for Families?

Yes — and they can make a meaningful difference.

Many families qualify for:

• Dependent Care FSA
• Child and Dependent Care Tax Credit

To claim these benefits, legal payroll and proper documentation are required.

How Dream Nannies Supports Charlotte Families

While we don’t provide tax advice, we do guide families through the entire nanny hiring process from start to finish.

When you work with Georgia’s Dream Nannies, we:

• Educate families early on household-employer responsibilities
• Ensure candidates understand legal employment expectations
• Connect you with trusted payroll and tax resources
• Support you well beyond placement

If you’re hiring in the Charlotte area, you can learn more about our local services here:
https://www.gadreamnannies.com/trustworthy-nanny-agency-in-charlotte-nc-georgias-dream-nannies/

Our goal is to make the process feel clear, professional, and supportive — so your focus stays where it belongs: your family.

Final Thoughts for Charlotte Parents

Nanny taxes don’t have to be stressful — they’re simply part of hiring the right way.

With the proper systems in place:

• Your nanny feels protected and valued
• Your family stays compliant
• Everyone starts the relationship on solid footing

If you’re considering hiring a nanny in Charlotte and want expert guidance from people who do this every day, we’re always happy to help.

Disclaimer: This article is for general informational purposes only and does not constitute tax or legal advice. Please consult a qualified tax professional regarding your specific situation.