What does it take to pay a nanny legally in California? More than in any other state — and less than most families fear once it is set up. The short version: you register with the EDD within 20 days of paying $750 in a quarter, you pay employer taxes of roughly 8% on top of gross wages, you withhold Social Security, Medicare, and a 1.3% state disability tax from your nanny's pay, and you follow the nation's strictest domestic-worker rules on overtime, sick leave, and workers' compensation.
This guide is the California layer. It covers the state taxes, the EDD paperwork, 2026 minimum wages in the major metros, and the employment rules that surprise families most — with links to deeper guides on each. For the federal side that applies everywhere — the $3,000 threshold, Schedule H, W-2s — start with our complete nanny tax guide.
California household employers owe federal FICA (7.65%) and FUTA plus three state obligations: unemployment insurance (3.4% of the first $7,000 for new employers), the 0.1% Employment Training Tax, and 1.3% SDI withheld from the nanny's wages with no cap in 2026. Register with the EDD within 20 days of paying $750 in a quarter. Nannies earn overtime after a 9-hour day or 45-hour week under the Domestic Worker Bill of Rights, accrue at least 40 hours of paid sick leave a year, and must be covered by workers' compensation. On a $62,400 salary, the employer side runs about $5,060 a year — before a $7,500 Dependent Care FSA claws back roughly half.
What Taxes Do You Owe on a Nanny in California?
Once you pay any household employee $3,000 or more in 2026, federal employment taxes apply; California's own thresholds arrive even sooner. Here is the full stack:
| Tax | Rate (2026) | Who pays | Wage base |
|---|---|---|---|
| Social Security & Medicare (FICA) | 7.65% + 7.65% | You and your nanny each | All wages |
| Federal unemployment (FUTA) | 0.6% after state credit | You | First $7,000 |
| CA Unemployment Insurance (UI) | 3.4% for new employers | You | First $7,000 |
| CA Employment Training Tax (ETT) | 0.1% | You | First $7,000 |
| CA State Disability Insurance (SDI) | 1.3% | Nanny (you withhold) | All wages — no cap |
| CA income tax (PIT) | Per DE 4 elections | Nanny (withholding optional) | All wages |
Worked example: a nanny at $30/hour, 40 hours a week, earns $62,400 a year. Your employer-side bill is FICA $4,774 + FUTA $42 + UI $238 + ETT $7 = about $5,061, or 8.1% on top of gross. From her checks you withhold her FICA ($4,774), SDI ($811), and any income tax she elects on her DE 4 and W-4. Two details trip families up: SDI lost its wage cap in 2024, so the 1.3% runs on every dollar all year, and state income-tax withholding is optional for household employers — but if you skip it, your nanny should be making estimated payments so April does not hurt.
How Do You Register with the EDD?
California requires household employers to register with the Employment Development Department within 20 days of paying $750 or more in cash wages in a calendar quarter — a threshold most full-time arrangements cross in the first week. You file the Employers of Household Workers Registration form (DE 1HW) through the EDD's e-Services portal and receive a state employer account number.
The thresholds are tiered: at $750 in a quarter you must begin withholding SDI; at $1,000 in a quarter you also owe UI and ETT. Once triggered, the obligations continue through the rest of that year and the following year even if wages dip. Three more pieces of housekeeping:
- New-hire report: file form DE 34 within 20 days of your nanny's start date.
- Quarterly e-filing: wage reports and tax deposits go through e-Services; paper filing is no longer an option.
- Annual option: household employers expecting $20,000 or less in annual wages can elect to pay state payroll taxes once a year instead of quarterly — useful for part-time arrangements.
- Income-tax withholding: unlike SDI, withholding California PIT is optional for household employers. If your nanny wants it — most full-time nannies do — she completes a DE 4 alongside her federal W-4 and you remit it with your regular deposits.
California Minimum Wage for Nannies in 2026
The state floor rose to $16.90 on January 1, 2026, but the floor that binds you is your city's — both San Francisco and Los Angeles apply their ordinances to anyone working two or more hours a week inside city limits, which includes a nanny in your home:
| Jurisdiction | 2026 minimum wage | Market nanny rate |
|---|---|---|
| California (state floor) | $16.90 | — |
| San Francisco | $19.61 (July 1, 2026) | $25–$35/hour |
| Los Angeles (city) | $18.42 (July 1, 2026) | $18–$26/hour |
| San Diego | $17.75 (Jan 1, 2026) | $19–$27/hour |
The Bay Area suburbs run their own ordinances too — Palo Alto's 2026 minimum is $18.70 and Mountain View's is $19.70, both adjusted each January — so a family in the Peninsula tech corridor should check its own city's rate rather than assume the state floor. The ordinance that applies is the one where the work happens, not where the nanny lives.
In practice, market rates in the coastal metros sit comfortably above the legal floors — experienced Bay Area nannies command $30+ — so minimum wage matters less for setting pay than for compliance edges: it is the floor for every hour worked, including trial days, training hours, and travel time between your home and activities.
The 9-Hour Overtime Day: California's DWBOR Rule
The Domestic Worker Bill of Rights (AB 241) gives California nannies the strongest overtime protection in the country. A nanny who works as a personal attendant — meaning at least 80% of her time is caring for your children — earns 1.5x pay after 9 hours in a day or 45 hours in a week. A 10-hour Tuesday triggers an hour of overtime even in a 40-hour week. If housekeeping, cooking for the family, or errands exceed 20% of her time, she falls under the standard rules instead: overtime after 8 hours a day or 40 a week, and double time past 12.
This is the single most common compliance miss we see in California households, because families track weekly totals and never notice the long days. Thirty minutes of daily overtime at a $30 base rate — two parents home at 6:30 instead of 6:00 — adds about $1,950 a year that must show up on pay stubs. The full mechanics — live-in rules, calculating the regular rate, guaranteed-hours interactions — are in our nanny overtime laws guide.
The pattern the Beverly team sees in California searches: families budget carefully for the hourly rate and are then surprised by the overtime line, because a 7:30-to-5:30 day — entirely normal for two commuting parents — is a 10-hour day, and every one of them carries an hour of time-and-a-half.
See what a coordinated search looks like. The research is the easy part. In two minutes, watch how a Beverly coordinator runs the rest — agencies, screening, and contracts — so you don't have to.
Watch: Meet Beverly · 2 min →Sick Leave, Workers' Comp, and the Other Non-Tax Rules
Three more California obligations come with the payroll, each covered in depth in its own guide:
- Paid sick leave: your nanny accrues at least 1 hour per 30 hours worked, usable up to 40 hours or 5 days per year statewide. Several cities, San Francisco among them, layer on more generous local ordinances. Details in our nanny sick leave guide.
- Workers' compensation: required once a household employee works 52 hours and earns $100 in a 90-day period — effectively every regular nanny. Many homeowner's policies cover it via an inexpensive rider; the State Compensation Insurance Fund sells standalone policies if yours does not. See our workers' comp guide for costs and setup.
- Meal and rest breaks: personal attendants are largely exempt, but a nanny with substantial housekeeping duties is owed a 30-minute unpaid meal break and paid 10-minute rest breaks like any hourly employee.
How to Pay Nanny Taxes in California: 5 Steps
The setup is front-loaded; after week one it runs on rails.
Step 1: Get your federal EIN
Ten minutes on the IRS site. You need it for every filing that follows.
Step 2: File the DE 1HW with the EDD
Register through e-Services within 20 days of crossing $750 in quarterly wages, and file the DE 34 new-hire report at the same sitting.
Step 3: Set up compliant payroll
Each paycheck needs FICA and SDI withheld, overtime calculated on the 9-hour day, sick leave accruing, and an itemized pay stub — which California requires. A household payroll service automates all of it for $49–$75 a month; our setup guide shows the DIY route too. Given the state's stacked rules, California is where a service earns its fee fastest.
Step 4: File quarterly, both levels
State wage reports and deposits go to the EDD each quarter (or annually if you elected that track); federally, most families fold the nanny taxes into their own quarterly estimated payments and reconcile on Schedule H with their April return.
Step 5: Close out January
W-2 to your nanny by January 31, W-2 and W-3 to the Social Security Administration, and your final quarterly EDD report. Then the year is done.
What Legal Payroll Actually Costs in California
Back to the $62,400 nanny. Employer taxes of about $5,061, plus roughly $600 a year for a payroll service and a few hundred for workers' comp, lands the compliance bill near $6,000 a year. A Dependent Care FSA returns about $2,625 of that at a 35% marginal rate on the 2026 $7,500 limit. Net cost: roughly $280 a month to be fully legal in the strictest state in the country.
One more piece of honest arithmetic: those employer taxes are not linear forever. UI, ETT, and FUTA all stop at the first $7,000 of wages, so the marginal cost of a raise is just 7.65% FICA — paying $32 instead of $30 an hour costs you about $4,160 a year in wages but only $318 more in employer tax.
Against that, weigh California's downside scenario: back taxes at both levels, overtime claims with daily-overtime math and liquidated damages, and waiting-time penalties of up to 30 days of wages — on top of the roughly $25,000 average federal penalty exposure families face for paying under the table. California employees also have an unusually easy path to filing wage claims. The state has effectively priced this decision for you: here, more than anywhere, legal payroll is the cheap option.
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Even though we work to keep the information, stats, and details in this article accurate and up to date, please do your own financial and legal due diligence before acting on anything you read here, and reach out directly to the private companies and government agencies referenced for the most current details.