Nanny Taxes in Virginia

Minimum Wage

Household employees must be paid at least the highest of the federal, state, or applicable local minimum wage rates. In Virginia, the state’s minimum wage rate of $12.41/hour applies.

The Virginia Department of Labor Commissioner must adjust the minimum wage annually by the Average Consumer Price Index for all items, urban consumers (CPI-U).

Overtime Pay Rules

Household employees in Virginia are required to be paid at least time and a half for hours worked over 40 in a seven-day workweek. Overtime compensation is not required for live-in employees or when work is performed on a holiday.

State Unemployment Tax & Rate

In Virginia, the new employer SUI (state unemployment insurance) rate is 2.50 percent on the first $8,000 of wages for each employee. Employers with previous employees may be subject to a different rate. This is an employer-only tax.

Workers’ Compensation Insurance

Household employers in Virginia are not required to have workers’ compensation coverage if they have fewer than three employees. However, you can choose a voluntary policy to protect both you and your employees. Get a quote on workers’ compensation insurance.

Disability Benefits Insurance

The state has no disability benefits rules related to nanny tax and payroll.

Domestic Workers’ Bill of Rights

Virginia’s Domestic Worker Bill of Rights provides domestic workers with workplace protections including:

• Unlawful employment practice to fail or refuse to hire, discharge, or discriminate against any individual for the following reasons: compensation, race, color, religion, sex, sexual orientation, gender identity, marital status, pregnancy, childbirth, or related medical conditions, age, veteran status, or national origin.
• Salaried employees are to be paid at least once a month; hourly workers are to be paid at least every two weeks or twice each month.

Employee protection laws have also been extended to include domestic workers like nannies, senior caregivers, housekeepers, and estate staff. They are now allowed to file complaints regarding workplace safety, which will be investigated by the state’s Commission of Labor and Industry.

Paid Family and Medical Leave​

Virginia has enacted a paid family and medical leave insurance program (PFML) that will provide 12 weeks of partially compensated, job-protected leave to most Virginia employees. The effective date of the legislation is July 1, 2026. Contributions to fund the program start April 1, 2028, and benefits begin Dec. 1, 2028.

Although contributions for the new PFML program do not begin until April 1, 2028, employers should start familiarizing themselves with the program’s requirements and reviewing their leave policies for any needed updates.

Covered Employers and Employees

The program applies to employers that have paid wages of at least $1,500 in any quarter of the current or preceding year, or who have employed at least one person for part of a day in each of 20 weeks during that time. Employees are eligible for PFML if they meet the income eligibility requirements for the state’s unemployment insurance program.

Leave

Eligible employees receive up to 12 weeks of PFML per year for the following reasons:

• Child bonding (during the first year after the child’s birth, adoption or placement);
• Their employee’s own or a family member’s serious health condition;
• Care for a military service member who is a family member;
• Military exigency (family deployment leave); and
• Safety leave (only four weeks permitted annually of leave necessitated by domestic violence against or harassment, sexual assault or stalking of the employee or a family member).

Compensation

Workers on PFML receive 80% of their average weekly wage, with a weekly minimum PFML benefit of $100 and a weekly maximum of the state average weekly net earnings as defined in the state workers’ compensation law. The weekly maximum benefit is adjusted yearly.

Funding

The program is funded by contributions split equally between workers and employers with more than 10 employees. Smaller employers are exempt from the employer contribution, although, as with larger employers that are not exempt, they must withhold their employees’ contributions and remit them to the state. The contribution rate will be set by Oct. 1, 2027, and contributions will begin the following April. The rate will be adjusted annually.

Learn more

Other State Regulations

Final Pay

Terminated household employees are entitled to payment of their wages on or before the next regular payday.

Helpful Links for Nanny Taxes in Virginia

• Virginia Department of Labor
• Virginia Office of Finance

Federal Regulations

All household employers need to follow certain federal regulations, including:

Fair Labor Standards Act (FLSA) Classification Guidelines

• Household workers are considered employees and not independent contractors. Learn more about misclassifying employees as independent contractors.
• Household workers are also non-exempt employees, meaning they receive at least time-and-a-half for hours worked over 40 per workweek. Learn more about overtime pay.

FICA Taxes

Social Security and Medicare taxes are commonly referred to as FICA taxes.

If you pay cash wages of $3,000 or more to any household employee in 2026 (or paid a domestic worker $2,800 or more in 2025), you must withhold and pay FICA taxes. FICA taxes are 15.3 percent of cash wages.

As an employer, you pay 7.65 percent (6.2 percent for Social Security and 1.45 percent for Medicare).

Your employee's share is also 7.65 percent, which you may withhold from their wages or pay yourself.

You don't withhold or owe FICA taxes on wages you pay to your spouse, child under the age of 21, parent, or any employee under 18 at any time during the calendar year.

Federal Unemployment Tax (FUTA)

If you pay a household employee total cash wages of $1,000 or more in any calendar quarter, you'll owe federal unemployment tax. This is an employer-only tax. FUTA is 6% of cash wages on the first $7,000 of wages paid to an employee.

Mileage Reimbursement

If your employee uses their own car in the course of their work, you can reimburse them for mileage. For 2026, the IRS has set the optional standard mileage rate at 72.5 cents per mile driven. Paying mileage is not mandatory in most states, and you can reimburse your employee at a different rate. However, if mileage costs cause your employee to fall below the minimum wage, you must reimburse them for mileage.

Remitting Taxes Quarterly

Household employers can remit taxes, including FICA, employee income, and federal unemployment, quarterly using Form 1040-ES. If a household employer does not remit their taxes quarterly, the entire amount will be due when they file their personal tax return. This could cause an underpayment penalty.

Year-End Requirements

By January 31, household employers must provide Form W-2 to their employees and submit Form W-3 and Copy A of Form W-2 to the Social Security Administration. Then, a household employer must file Schedule H with their personal tax return. Learn more: How to File Schedule H