How to Pay Your Au Pair Legally in California

If you live in California and are welcoming an au pair into your home, here’s an overview on how to make sure you pay your au pair correctly.

Au pairs in CA are considered household employees. The CA EDD (Employment Development Department) publishes a clear and detailed Household Employer’s Guide (see page 10 where au pairs are listed as employees) which outlines who is considered an employee and what the employer responsibilities are. The IRS also has a specific au pair page covering the tax rules.

If you pay your au pair over $750.00 in a quarter, then you need to make sure you are registered as an employer with the CA EDD and file and pay employer and employee taxes. Au pairs need SDI (state disability) tax withheld. If you pay over $1,000.00 in a quarter, then you also pay the CA unemployment tax and ETT (a training tax).

Here’s a checklist to help guide you:

1- Pay your au pair the correct minimum wage. Different cities in CA may have a higher min wage than the state minimum wage, always adhere to your local minimum wage.

2- Set up a payroll system either on your own or through a payroll service (like us!) so taxes are handled. If you decide to use Nest Payroll, you can exempt your au pair from FICA tax (social security and medicare).

3- Provide a proper paystub to your au pair that shows how taxes are being withheld, the hourly rate, etc. (Nest Payroll will automatically email a pay stub to your au pair).

3- Register with CA as an employer (Nest Payroll will do this for you).

4- Each quarter, file the wage data and make the required tax payments (Nest Payroll handles this).

5- Provide your au pair with a W-2 by the end of January, plus file the W-2 and your employer W-3 with the Social Security Administration (Nest Payroll will do this for you).

6- Create a Schedule H that gets included in your personal 1040 tax return (Nest Payroll does this for you).

7- You may be able to claim a tax credit on your personal income tax return with the Child and Dependent Care tax credit.

The information provided on this page is general in nature. This is not to be taken as tax, legal, benefits, financial, or HR advice. Since rules and regulations change over time and can vary by location, consult an attorney or financial advisor for your specific situation.