Finding helpful Arizona nanny tax information is not always easy. That’s why we’ve combined all the state and federal tax and labor law information you’ll need! Check out the information below that HomePay is here to help with.
Checklist for Arizona household employers
We know you’re busy! Here’s a quick “to-do” list with links to extra details below.
Beginning of employment
- Obtain workers’ compensation insurance.
- Provide an employment contract.
- Display employment posters.
During employment
- Pay at least Arizona minimum wage.
- Pay overtime, when it applies.
- Provide Arizona required sick leave.
Optional benefits for your employee
Ending employment
- Manage unused paid time off.
Beginning of employment
Workers’ compensation
Household employers in Arizona are not required to get coverage for workers’ compensation insurance, but we recommend to do so. These policies pay for medical expenses and lost wages if an employee has a work-related injury or illness. Obtain an instant quote and purchase a policy online, or by contacting our partner, Clarke White, at 804-267-1210 or wcnanny@allrisks.com.
Employment contract
Household employers in Arizona are required to provide a written employment contract to their employee at the time of hire. The contract must include the employee’s hourly rate of pay, when paydays will occur and how the employee will be paid (i.e. Direct Deposit, mailed a check, etc.).
Employment posters
Families in Arizona are required to notify their employee(s) of their rights by sharing these posters.
During employment
Minimum wage rates
- Arizona state: $12.80/hour
- Flagstaff: $15.50/hour
- Tucson: $13.00/hour
Note: Whenever more than one minimum wage rate applies, employers are required to pay the higher rate
Arizona overtime requirements
- Live-out employees must be paid 1.5x their hourly rate for all hours worked over 40 in a workweek.
- Live-in employees are not required to be paid overtime.
- Overtime is not required to be paid when work is performed on a holiday.
Paid sick leave
Household employees in Arizona are required to provide up to 24 hours of paid sick time to their employee each calendar year. HomePay will handle the accruals on your account.
Optional benefits for your employee
Health insurance
Families with only 1 employee can make contributions toward their employee’s health insurance premiums and treat the amount as non-taxable compensation. In this scenario, neither the employee nor the employer are required to pay any taxes on that portion of the compensation.
Families with 2 or more employees have 3 options:
- Set up an Individual Coverage Health Reimbursement Arrangement (ICHRA).
- Set up a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA).
- Purchase a policy through SHOP (Small Business Health Options Program).
Visit our health insurance page for more information about these options.
Mileage reimbursements
The current federal mileage reimbursement rate is 58.5 cents per mile and only covers miles driven by your employee while on the job. Miles driven commuting are not eligible for reimbursement.
Ending employment
Managing unused PTO
Arizona household employers must pay their employees for unused sick and/or vacation time.
The information contained in this article is general in nature, may not be applicable to your specific circumstances, and is not intended to be a substitute for or relied upon as personalized tax or legal advice.