Nanny Taxes & Payroll in Pennsylvania

Minimum Wage

Household employees must be paid at least the highest of the federal, state, or applicable local minimum wage rates. Pennsylvania’s state minimum wage rate of $7.25/hour, which is the same as the federal rate, applies.

Overtime Pay Rules

Household employees in Pennsylvania must 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 Pennsylvania, the new employer SUI (state unemployment insurance) rate is 3.822 percent on the first $10,000 of each employee’s wages. Employers with previous employees may be subject to a different rate.

Pennsylvania is one of the few states that requires employees to also pay into the unemployment fund. Employees pay 0.07 percent of their total gross wages for unemployment. Employers are responsible for withholding this employee contribution. Employee withholding is not limited to the taxable wage base. It applies to the total wages paid for the year.

Workers’ Compensation Insurance

Household employers in [state] are not required to have workers’ compensation coverage for any full- or part-time employees. However, you can choose a voluntary policy to protect both you and your employee. Get a quote on workers’ compensation insurance.

Disability Benefits Insurance

Pennsylvania does not have disability benefits insurance requirements related to household employment.

Domestic Workers’ Bill of Rights

Philadelphia Domestic Workers’ Bill of Rights

Household employers in Philadelphia are required to provide their workers with:

• Written contract governing:
  • a specific list of job duties
  • hourly wage and overtime wage
  • weekly schedule including the number of hours per week
  • the manner and frequency of payment
  • breaks for rest and meals
  • paid or unpaid leave, including sick time
  • paid holidays
  • any other benefits provided
  • modes of transportation required and whether provided
  • value of housing if provided
  • sleeping period and personal time for live-in workers
  • term of the contract
  • any other terms and conditions as agreed upon by the domestic worker and the employer (provided that no provisions in the written agreement may waive a domestic worker’s rights under federal, state, or local law)
• An uninterrupted rest period of not less than 10 minutes for every four consecutive hours worked
• An uninterrupted 30-minute meal break after more than five consecutive hours worked.
• Paid and unpaid leave
• Two-week notification period before termination, and a four-week notification period before termination for live-in domestic workers.

Learn more about Philadelphia’s Domestic Workers’ Bill of Rights and get resources from the city.

Paid Leave Laws

Pittsburgh Paid Sick Days Act (PSDA)

Full-time and part-time employees working at least 35 hours in a year in Pittsburgh are entitled to paid sick leave. Employers with fewer than 15 employees must provide 48 hours of paid sick leave per year.

Employees accrue at least one hour of paid sick leave for every 30 hours worked beginning on their first day of employment. An employer may also provide all annual paid sick leave upfront.

Employees can begin using their accrued paid sick time after their 90th day of employment.

Workers can use their accrued time when they’re sick, need a medical diagnosis, or need treatment. It can also be used to care for family members.

Learn more about Pittsburgh’s Paid Sick Days Act.

Other State Regulations

Lehigh County Human Relations Ordinance

The Lehigh County Human Relations Ordinance (LCHRO) applies to nearly all employers with at least one employee, including household employers.

The LCHRO is intended to ensure equal opportunity concerning employment, housing, education, healthcare, and public accommodations without regard to actual or perceived protected characteristics. It prohibits discrimination in hiring and employment based on several protected characteristics, including race, sex, physical or mental disability, age, and height or weight.

The LCHRO also contains “ban-the-box” rules and a ban on salary history inquiries. “Ban-the-box” laws aim to give individuals with criminal records a fair chance when applying for a job.

Final Pay

All earned wages of a terminated household employee must be paid by the next regular payday, regardless of whether the termination is voluntary or involuntary.

Helpful Links for Nanny Taxes in Pennsylvania

• Pennsylvania Department of Labor & Industry
• Office of Unemployment Compensation
• Domestic Worker Bill of Rights Resources

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