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North Carolina tax and labor law guide

Household employment requirements for families hiring a caregiver in North Carolina

If you have nanny tax responsibilities in North Carolina, you know there is a lot to keep up with. That’s why we created this overview to make a resource available for all your household employment questions. Check out the information below that HomePay is here to help with.

Checklist for North Carolina household employers

We know you’re busy! Here’s a quick “to-do” list with links to extra details below.

Beginning of employment 

During employment 

Optional benefits for your employee

Ending employment

Beginning of employment 

Workers’ compensation

Household employers in North Carolina are not required to carry a workers’ compensation insurance policy, but we recommend doing 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 contact our partner, Clarke White, at 804-267-1210 or

Employment contract 

At the time of hire, household employers in North Carolina are required to provide their employees with a written contract. The contract must include the employer’s address, the employee’s promised wages, regular pay day and other policies governing the employee’s job.

Employment posters

Families in North Carolina are required to notify their employee of their rights by sharing these posters

During employment 

Minimum wage rate

The current minimum wage in North Carolina is $7.25/hour.

North Carolina 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. 

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:

  1. Set up an Individual Coverage Health Reimbursement Arrangement (ICHRA).
  2. Set up a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA).
  3. 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 $0.56 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 

North Carolina household employers do not need to pay their employees for unused sick time, but are required to pay out any unused vacation time unless their employment contract states otherwise.

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