How to become a self-employed caregiver for seniors

The aging population is increasing rapidly, with millions of people entering retirement age every day. As such, there is a strong need for compassionate, reliable and skilled senior caregivers. 

“There are few careers that allow you to make such a profound impact on someone’s life,” says Aaron Marcum, founder of Breakaway365, a company which helps home care professionals grow their businesses. “Caregiving is not just about the salary; it’s about the reason behind the work.”

While many caregivers choose to work for a home care agency, maybe you’re interested in starting your own senior caregiving business and working directly with families as a self-employed caregiver. Looking to understand what it takes to go the business owner route? Here, we’ll cover everything you need to know about entering this profession, as well as whether or not starting a business is the most economical way for you to classify the work you do when it comes to tax purposes.

What is a self-employed caregiver? 

A self-employed caregiver “works without being tied to an agency, taking on private clients and setting their terms,” says Moti Gamburd, CEO of CARE Homecare, an in-home care agency serving seniors in California’s Los Angeles and Orange Counties. 

“Becoming a self-employed caregiver isn’t just a job,” says Marcum. “It’s a business opportunity that allows you to take control of your income, schedule and career path.”

“Becoming a self-employed caregiver isn’t just a job. It’s a business opportunity that allows you to take control of your income, schedule and career path.”

— Aaron Marcum, founder, Breakaway365

Because you choose your hours and clients, you can take “more time for family, personal growth and well-being,” says Marcum.

You also have entrepreneurial freedom to develop your business, which may include focusing on specific care, expanding your range of services or even employing others. “Some focus on companionship and household assistance,” says Gamburd, “while others provide more specialized care, like dementia support or post-hospital recovery.”

What caregiving work can you do as a self-employed caregiver? 

Becoming a caregiver for seniors is “a huge opportunity for those with a heart for service to step into a very fulfilling, high-demand career,” says Marcum. “Families want to ensure their loved ones are well taken care of by trusted professionals who can give quality care while allowing them to preserve their dignity and independence.” 

According to Marcum, there are several different types of self-employed senior caregivers you can become, including:

• Companion caregivers: Offer social support, meal preparation and light housekeeping, but don’t give medical care.
• Personal care aides (PCAs): Help with personal hygiene and activities of daily living, including dressing and moving around.
• Certified nursing assistants (CNAs) and home health aides (HHA): Require certification and usually offer more comprehensive care; however, neither can provide medical care.
• Specialized caregivers: Work with seniors who need support for Alzheimer’s, dementia or other conditions that require special skills.

Certifications needed for self-employed caregivers

While certifications aren’t strictly required for being a self-employed caregiver in most states, there are certain certifications that might make you more qualified and more appealing to potential clients.

According to Marcum, helpful senior care certifications include:

• CPR and first aid certification.
• Certified nursing assistant (CNA) training.
• Home health aide (HHA) certification.
• Specialized training (Alzheimer’s, dementia, Parkinson’s, etc.).

Other skills needed to be a self-employed caregiver                   

Certification, as well as hands-on experience, aren’t the only ingredients needed to become a successful self-employed caregiver. 

“In addition to the certifications, a successful caregiver needs compassion, patience, communication skills and problem-solving skills,” Marcum says. “These cannot be learned but are crucial in this profession.”

Self-employed vs. employee

Here’s where a self-employed classification gets a bit tricky, especially as it pertains to how you must file your taxes with the IRS. When you look at how the IRS defines different types of workers, it almost always classifies domestic workers working in a family’s home (like yourself) as household employees, not self-employed and not independent contractors. 

In both cases — as a self-employed caregiver or an employee — you avoid agency fees and may determine and negotiate your own pay rate. However, as an employee of a family, you are not self-employed. That’s not necessarily a bad thing, as self-employed caregivers don’t necessarily have a financial advantage. 

Here’s what you need to know to decide which is best for you.

Self-employed caregiver

If you wish to be self-employed, including working as a self-employed independent contractor, you do have more flexibility and get to choose your own hours. You may also find other workers to fill in for you if you’re unable to work, which employees are almost never allowed to do, but it also means you:

• Must register your business as an LLC or apply for a business license, depending on your location.
• Must file your own taxes and pay estimated taxes quarterly. 
• Need to buy your own liability insurance.
• Must pay both halves of the FICA tax (additional 7.65% tax).
• Are not entitled to overtime or paid time off. 

Some of these costs may be offset by tax write-offs as a business, but generally — pay rates being equal — employees have a higher take-home pay (but, of course, less freedom).

Family employee

As a family (or household) employee, your employer controls not only what work is done, but how it is done, so you may have less flexibility, but it also means you:

• File your income tax return using a W-2, which is provided to you by your employer.
• Are entitled to overtime and, in some states, paid time off. 
• Are eligible for unemployment benefits if you lose your job due to no fault of your own.
• May have a higher take-home pay than you would as a self-employed caregiver.

Tax and employment laws are complicated and can vary from one personal situation to another. If you are confused about which type of senior caregiver you are and how you should file your taxes, connect with an experienced accountant.

Read more: How can you tell if you’re an employee or an independent contractor?

Comparison: Self-employed caregiver vs. employee

	Self-employed caregiver (including independent contractor)	Household employee
Terms of work	You control what work is done and how it is done.	The employer controls what work is done and how it is done.
Business setup	Must register your business as an LLC or apply for a business license, depending on your location.	N/A
Pay rate	Determine and negotiate your own pay rate.	Determine and negotiate your own pay rate.
Tax responsibilities	Must pay self-employment taxes.	The employer has tax filing responsibilities.
Tax forms	Must file your own annual income tax return and pay estimated taxes quarterly.	Must file your income tax return using a W-2 form.
Liability insurance	Required to buy your own insurance.	N/A
Health insurance	Must pay your own.	May qualify for a healthcare subsidy to lower the cost of your premiums if you are paid legally and purchase an individual policy on the health insurance marketplace.
Overtime and paid time off	Not eligible.	Entitled to overtime and, in some states, paid time off.
Unemployment benefits	Not eligible.	Eligible for unemployment benefits if you lose your job due to no fault of your own.
Retirement benefits	Not eligible.	Employer pays into Social Security and Medicare.

How to become a self-employed caregiver

If you do decide you want to become a self-employed caregiver, you’ll need to take several important steps, Gamburd says. These include:

• Registering your business or applying for a business license, depending on your location.
• Obtaining liability insurance to protect yourself and your clients. 
• Meeting with an accountant to make sure you’re well-versed on taxes.
• Educating yourself about labor laws that impact caregivers.
• Understanding client privacy and HIPAA policies.
• Marketing your services in your community, among other caregivers and in online forums or caregiver websites such as Care.com.
• Developing a clear contract for clients that outlines payment terms and expectations.

How much can you make as a self-employed caregiver?

Just like you’ll see with employee pay rates, how much you will make as an self-employed  caregiver can vary depending on your location, experience and the level of care provided, says Gamburd.

Nationally, the posted senior caregiver rate averages $20.70 per hour, according to recent Care.com data. Here are some examples of posted rates for senior caregivers based on location. You can enter your city and state into our Cost of Care calculator to review posted rates near you.

Current posted senior caregiver rates in top U.S. cities*

City, State	Hourly Senior Caregiver Rate
Atlanta, Georgia	$19.17/hr
Chicago, Illinois	$21.15/hr
Denver, Colorado	$23.62/hr
Los Angeles, California	$23.40/hr
New York, New York	$23.21/hr
Orlando, Florida	$18.93/hr
Philadelphia, Pennsylvania	$19.15/hr
Phoenix, Arizona	$21.90/hr
San Antonio, Texas	$17.27/hr
Seattle, Washington	$26.63/hr

Rates can go up for people who can provide more nuanced care, like Alzheimer’s or dementia support, Gamburd adds. “As you gain experience and build a client base, it is recommended to increase your rates,” he explains. “However, you have to be consistent in client acquisition to maintain a steady income.”

“As you gain experience and build a client base, it is recommended to increase your rates.”

— Moti Gamburd, CEO, CARE Homecare

Potential challenges of being self-employed

While there are some benefits to becoming a self-employed caregiver, there are some challenges to be aware of when you’re running your own business, including all the responsibilities of self-employment, top to bottom. 

“The biggest challenge is the lack of [steady] clients,” says Marcum. “Since no one will be assigning you tasks like in an agency, you will have to go out of your way to create your client list through word of mouth, social media and caregiver directories to get consistent work.”

Additionally, there can be issues of income instability and lack of benefits. “In some cases, clients will pay differently depending on their availability,” Marcum shares. “Unlike traditional jobs, independent caregivers do not get employer’s benefits, meaning you have to pay for your own health insurance, retirement and taxes.”

Finally, caregiving in any form can be physically and emotionally demanding and can lead to burnout. However, add that atop self-employment responsibilities, and it’s even more important to prioritize your own self-care as a caregiver, and set appropriate boundaries and limits with your clients.  

Additional resources to become a self-employed caregiver 

If becoming a self-employed senior caregiver sounds appealing to you, but you don’t know where to start, there are resources out there to help you reach your goals. This includes certifications programs from places like:

• Senior care agencies.
• Senior care centers.
• Community colleges.
• The Red Cross. 
• Other online courses. 

Marcum also recommends seeking peer support and job leads in your community and in places like online caregiver communities and Facebook groups.

Starting this journey begins with identifying what skills you need to develop, honing them and then beginning to create the job that you want, Marcum adds. 

He concludes, “If you have passion, resilience and a work ethic that you can take with you, becoming a self-employed caregiver can be both enjoyable and lucrative.”