Caregiver Payroll: Paying a Home Caregiver the Right Way
A caregiver you hire directly to help an aging parent or family member at home is typically your household employee, subject to the same $3,000/year or $1,000/quarter rule as a nanny — even if the caregiver was found through an agency's referral list rather than employed by the agency itself.
Caregiver, agency employee, or independent contractor?
- You pay the caregiver directly, set their schedule, and they work in the care recipient's home → likely your employee
- You pay an agency, which pays and manages the caregiver → the agency is usually the employer
- A registry or referral service connects you but doesn't employ the caregiver → you're often still the employer, even though the registry helped you find them
Read the agreement carefully — many caregiver registries are explicit that the family, not the registry, is the legal employer.
What's different about caregiver pay
A few things come up more often with caregivers than with nannies or housekeepers:
- Live-in arrangements have their own overtime and minimum wage rules in many states — a flat live-in rate doesn't automatically satisfy them
- Overnight and on-call hours may or may not count as work time, depending on how much the caregiver is free to leave or sleep uninterrupted
- Multiple family members sometimes split the cost — but for tax purposes, there's usually one household employer of record
Who's the employer when the care recipient isn't the one paying?
If an adult child pays for a parent's caregiver directly, the adult child (or whoever controls the work and issues payment) is generally the employer — not the parent receiving care, unless the parent is directing and paying for the work themselves.
Frequently asked questions
Does Medicare or Medicaid ever count as the employer?
Some state Medicaid self-directed care programs use a separate fiscal intermediary as the employer of record. If you're in one of those programs, check with your program administrator — you may not need to run payroll yourself.
Do live-in caregivers get overtime?
It depends on the state and the specifics of the arrangement. See our overtime guide, and confirm with your state's labor department for live-in-specific rules.
Related guides
Household Employer Guide: Are You One, and What It Means
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Overtime Rules for Nannies, Housekeepers, and Caregivers
Most household employees are entitled to overtime pay — usually 1.5x their regular rate fo…
Employee vs. Independent Contractor: How to Tell the Difference at Home
If you decide when, where, and how the work gets done in your home — which is true for nea…
One caregiver, one clear paycheck.
Enter hours, Sadie calculates the tax withholding — for a caregiver, a nanny, or anyone else you employ at home.
This guide is general information, not tax or legal advice. Rules vary by state and change over time — confirm anything specific to your situation with a licensed professional or your state's labor department.