Nanny overtime: what families owe and how to calculate it

Nanny overtime is the extra pay you owe when your nanny works more than 40 hours in a workweek. Under federal law, most nannies who don't live in your home earn 1.5 times their regular rate for every hour over 40. Live-in nannies are exempt from federal overtime but still earn minimum wage, and California and New York add their own rules.

The U.S. Department of Labor's DOL live-in worker fact sheet requires "time and a half" for "all hours worked over 40 in a workweek." The rule applies unless your nanny falls under an exemption, and the live-in exemption is the one most families need to check.

Overtime tends to sneak up on you. A late pickup, a long travel week, a paid holiday or paying in cash can each raise questions about what you owe. Each one is a legal question, even when it feels routine.

The outcome you want is simple: pay correctly and keep your nanny's trust. Fair pay is part of a good working relationship, and at Gathered Hands we believe nannies should keep every dollar they earn.

This guide is general information, not legal advice. State law may be stricter than federal law, so check your state labor department before you set pay.

The rules that decide what you owe.

Two layers of law decide nanny overtime: federal law and your state's law. Cornell Law School's Legal Information Institute publishes the FLSA state law provision, 29 U.S.C. 218(a). It says federal law doesn't excuse compliance with a state law setting a lower maximum workweek.

That makes the federal rules a floor. The U.S. Department of Labor's DOL FLSA compliance toolkit says "employers must comply with both federal and state laws." State law may be stricter, and in California and New York it is.

Federal law covers nannies who work in your home.

The U.S. Department of Labor's DOL private homes fact sheet says "Persons employed in domestic service in private homes are covered by the FLSA." Its list of domestic service workers names nannies directly, alongside babysitters and housekeepers.

Under the Fair Labor Standards Act (FLSA), overtime is 1.5 times the regular rate for hours past 40 in a workweek. This is the core nanny overtime rule for most families, and each workweek stands alone. Federal regulations (29 CFR 778.104) don't allow averaging, so a 50-hour week can't be balanced against a 30-hour week.

Live-in nannies are the main federal exception. The U.S. Department of Labor exempts workers who reside in your home from federal overtime, though you still owe them minimum wage for every hour. Residing means living there permanently or for extended periods, such as five days a week totaling 120 hours or more.

Long shifts alone don't make someone a live-in. A nanny who works 24-hour shifts but doesn't reside in your home is still treated as live-out for federal overtime.

Hours worked also include on-duty time. The U.S. Department of Labor's DOL hours worked guidance says a nanny who must watch over a sleeping child is on duty and must be paid. Time when your nanny is fully relieved of duty and free to use it for themselves doesn't count.

California and New York add their own overtime rules.

Some states set stricter thresholds than federal law. California and New York are two clear examples, and both apply on top of the federal rule.

In California, the answer depends on your nanny's duties and whether they live with you. The California Department of Industrial Relations explains the split in its California domestic worker overtime FAQ. A nanny who spends more than 20% of their time on other work, like cooking or laundry, isn't a personal attendant.

A personal attendant spends 80% or more of their time supervising and caring for your child. Personal attendants earn overtime after 9 hours a day or 45 hours a week, whether or not they live in. For a live-out personal attendant, federal law also applies, with weekly overtime after 40 hours.

Since employers must comply with both laws, a common approach is to pay overtime whenever either rule calls for it. Before you set pay, confirm with an employment attorney or the state labor department.

Nannies who do more household work follow different California rules. A live-out nanny who isn't a personal attendant earns overtime after 8 hours a day or 40 hours a week. A live-in nanny who isn't a personal attendant earns overtime after 9 hours a day.

New York sets its own floor. The New York State Department of Labor's New York domestic workers rights notice sets overtime at 1 1/2 times the basic rate. It starts after 40 hours in a calendar week.

Live-in nannies in New York earn overtime after 44 hours, even though federal law exempts them. New York also requires one 24-hour day of rest each week, or overtime pay if your nanny agrees to work that day.

After one year with the same employer, your nanny is entitled to at least three paid days off. Casual babysitters and relatives fall outside these protections.

Here is how the three sets of rules compare side by side. Where two rules overlap, you must meet both, so pay overtime when either rule calls for it.

Other states may have their own domestic worker rules. Check your state labor department before you set a schedule.

What getting overtime right protects.

Paying nanny overtime correctly protects both sides of the relationship. Your nanny gets the pay they earned, and you avoid surprises that cost money or trust later.

Paying in cash still carries tax duties.

Paying "under the table" can feel simpler, but the IRS defines cash wages broadly. IRS Publication 926 says "cash wages" include wages you pay by check, money order and similar forms. The 2026 household tax threshold of $3,000 is measured in those cash wages.

Skipping those taxes has its own cost. If you're required to withhold and pay employment taxes and don't, IRS Publication 926 says you're generally liable for them. Interest and penalties may also be charged.

Clean records settle disputes.

The U.S. Department of Labor's DOL recordkeeping fact sheet spells out what to keep. It starts with your nanny's name and Social Security number, home address, and hours worked each day and in total each week. It also covers total cash wages paid each week, weekly amounts claimed for board or lodging, and extra pay for weekly hours over 40.

You must keep those records for 3 years. Your nanny can log their own hours, but you, the family, are responsible for the records.

Without them, a wage claim becomes your word against theirs. The FLSA damages provision, 29 U.S.C. 216(b) on Cornell LII, makes employers liable for unpaid overtime plus an equal amount in liquidated damages.

Taxes stay simple when you plan for overtime.

The IRS sets the 2026 threshold in its IRS household employer guide: $3,000 or more in cash wages to one household worker. Once you cross it, Social Security and Medicare taxes apply for 2026.

For 2026, those taxes total 15.3% of cash wages, split into a 7.65% employer share and a 7.65% employee share. Federal unemployment (FUTA) tax applies for 2026 once you pay $1,000 or more in cash wages in any calendar quarter. You file a Form W-2 for your nanny and report household taxes on Schedule H.

Nanny overtime matters here. The IRS says overtime pay is generally subject to Social Security and Medicare tax, so extra hours can push you past the threshold sooner.

Payroll makes overtime easier to track.

Running pay through payroll, or at least paying by check with a timesheet, leaves a record of every hour and rate. Payroll also handles withholding, so the tax side stays organized.

A pay stub that lists regular and nanny overtime hours separately lets your nanny check the math. It also gives you a clean answer if a question ever comes up.

Shared arrangements need extra care. If two families jointly employ a nanny, federal regulations (29 CFR 778.103) say all hours worked for those employers during the workweek must be totaled. Whether a share works that way depends on the facts, so get advice before you set up pay.

Your nanny trusts the paycheck.

Predictable, correct pay is part of being a good employer. When overtime shows up on time and adds up, your nanny can focus on your kids instead of checking the math.

On Gathered Hands, nannies set their own rates and keep all of it, because we never take a cut of their pay. The rate you agree on is the rate they get. If you're a nanny, you can create your nanny profile and list the rate you want.

Calculating nanny overtime in four steps.

Calculating nanny overtime takes four steps once you know which rules apply. The math below follows federal law, with California and paid time off covered after the examples.

1. Set the workweek. Pick a fixed, recurring seven-day period, such as Sunday through Saturday, and keep using it.
2. Total the hours your nanny actually worked that week. Include on-duty time, such as staying with a napping child.
3. Find the regular rate. For an hourly nanny, it's the hourly rate; for a weekly salary, divide the salary by the hours it covers.
4. Pay the regular rate for every hour, plus half the rate again for each hour over 40. That equals paying 1.5 times the rate on overtime hours.

Federal regulations at 29 CFR Part 778 (published on eCFR) set out the federal regular rate rules. Section 778.110 works through a $12 hourly rate over 46 hours. The total is $588: 46 hours at $12 ($552) plus 6 overtime hours at an extra $6 ($36).

Here is the same math at $25 an hour for a 45-hour week. Forty hours at $25 comes to $1,000, and 5 overtime hours at $37.50 add $187.50. Your nanny's total for the week is $1,187.50.

Small delays add up the same way. If your nanny's regular week is 40 hours and you run 30 minutes late four days in a row, that week has 2 overtime hours. At $25 an hour, that's $75 in nanny overtime on top of $1,000.

A weekly salary works the same way once you find the rate. The same federal rules (29 CFR 778.113) turn a $350 salary for a 35-hour week into a $10 regular rate.

California adds a daily check. Say your live-out nanny isn't a personal attendant and works a 10-hour day, so 2 of those hours are overtime that day. At $25 an hour, that day pays $200 for 8 hours plus $75 for 2 overtime hours, or $275.

The daily rule changes weekly totals too. Four 10-hour days add up to 40 hours, so federal overtime never starts, but California still counts 8 overtime hours. If that nanny were a personal attendant, only the 10th hour of each day would be daily overtime.

Paid time off needs care. Federal regulations at 29 CFR 778.218 say payments for occasional vacation or holiday time aren't compensation for hours of employment. None of that pay can be credited toward overtime you owe.

The U.S. Department of Labor's DOL Handy Reference Guide adds that the FLSA requires pay for all hours worked in a workweek. One reasonable reading of both rules is that federal overtime turns on hours actually worked.

Under that reading, a week with a paid holiday plus 40 hours on the job means overtime only if the worked hours pass 40. Have a payroll professional confirm your approach, since New York's rules and your own agreement may be more generous.

Fair pay is part of a good fit.

Getting nanny overtime right comes down to steady habits, set before the first long week. Agree on a schedule, write down when overtime is expected, track hours every week and pay overtime with that week's paycheck.

This guide is for families hiring directly who want a nanny relationship built on trust. That trust starts with a clear offer and a paycheck that matches it.

Gathered Hands is where families hire nannies directly, with no agency and no placement fee. We charge a flat monthly fee and never take a cut of your nanny's pay. When you're ready to meet nannies who fit your family, Get started.