How to Hire a Nanny in California Legally (Payroll, TrustLine, and Taxes Explained)

Hiring a nanny is one of the most personal things you’ll ever do. You’re not just finding someone to help with school pickups or bedtime routines. You’re choosing a person who will become part of your family’s daily rhythm. And while finding the right person is about connection and trust, hiring them legally is what gives everyone peace of mind.

If you’ve ever typed “how do I hire a nanny legally in California” or asked ChatGPT “do I really need to pay nanny taxes,” you’re in good company. Many families feel unsure about where to start. The good news is that once you know what’s required, it’s actually quite simple. At Premier Nanny Source, we help Bay Area families get it right every day so you can focus on finding the perfect fit.

Let’s walk through what legal hiring really means in California.

Is My Nanny an Employee or a Contractor

In almost every case, your nanny is considered a household employee. That means you, as the family, are the employer. You’re responsible for payroll, taxes, and workers’ compensation, just like any other employer in California.

It might sound formal, but it’s really about doing right by your caregiver. Paying legally allows your nanny to build credit, qualify for benefits, and be recognized as the professional they are. And it keeps your family protected, too.

Payroll, Taxes, and Overtime Simplified

California has some of the strongest protections for domestic workers in the country. Here’s what that means for you:

• Nannies are paid hourly, not salaried.
• Overtime applies after nine hours in a day or forty hours in a week, paid at time and a half.
• You’ll need an Employer Identification Number (EIN) from the IRS.
• You’ll withhold Social Security, Medicare, and state and federal income taxes.
• Nannies are entitled to at least twenty four hours of paid sick time each year.
• It’s best to pay weekly or every other week so your nanny has consistency.

If this all sounds like a lot, there are wonderful payroll services that make it easy. We love recommending Poppins Payroll and HomeWork Solutions because they handle every detail and keep everything compliant.

TrustLine California’s Official Background Check

TrustLine is California’s state-run caregiver registry maintained by the Department of Social Services. It’s the only background check that connects directly with both the FBI and the California Department of Justice.

Any nanny who works unsupervised in a private home should be TrustLine registered or in process. At Premier Nanny Source, every nanny we place is either fully cleared or in the final stages before starting. It’s the gold standard for safety and peace of mind.

Workers’ Compensation A Must in California

California law requires all household employers to carry workers’ compensation insurance, even if your nanny works part time.

This coverage protects everyone. If your nanny is ever injured while working, her medical care and wages are covered. You’re also protected from unexpected liability.

Some homeowner policies allow you to add this coverage, but most families will need a separate policy. Your payroll provider can help you set it up quickly.

The True Cost of Doing It Right

Paying a nanny legally may cost a little more upfront, but it saves you from expensive penalties later. More importantly, it sets the tone for a healthy, professional relationship built on trust and respect.

When you pay legally, your nanny receives:
✅ Pay stubs and proof of income
✅ Access to unemployment and disability benefits
✅ Credit toward Social Security and Medicare
✅ A relationship based on transparency and stability

For families, legal payroll also means access to tax savings through the Child and Dependent Care Credit or a Dependent Care FSA if your employer offers one.

How Premier Nanny Source Makes It Easy

Most parents don’t start a nanny search hoping to become experts in payroll and labor law. That’s exactly why we’re here.

When you hire through Premier Nanny Source, we help you:
• Set up payroll correctly and stay compliant
• Verify every nanny’s TrustLine background check
• Draft an employment agreement that meets California labor laws
• Connect with trusted payroll and insurance partners
• Receive continued support even after your nanny begins

We make it simple and supportive so you can focus on the joy of finding your perfect match.

Quick Questions Parents Always Ask

Do I have to pay nanny taxes in California
Yes. If you pay your nanny $2,700 or more in a year, you’re considered a household employer and must pay nanny taxes.

What is TrustLine and is it required
Yes. TrustLine is California’s official background check for caregivers working unsupervised with children in private homes.

Can I pay my nanny as a 1099 contractor
No. Nannies don’t qualify as independent contractors under California or federal law.

Do I need workers’ compensation insurance
Yes. It’s required for all household employers in California and protects both you and your nanny.

In Closing

Hiring a nanny legally might seem intimidating at first, but once you take it step by step, it becomes simple. You’re protecting your family, your caregiver, and the special relationship you’re building together.

At Premier Nanny Source, we make it easy to do things the right way from the very beginning. We’ll walk you through each step with clarity, kindness, and care so you can hire confidently and focus on what really matters.

If you’re ready to hire your next nanny the legal and stress free way, I’d love to help you get started.
Schedule a quick intro call here →