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Why Some Nannies Work Off the Books (And Why Some Don’t)

On the Books or Off the Books?

Online, whether in parenting forums, local classifieds, or caregiver platforms, nanny job listings often follow a familiar rhythm: a location, an hourly rate, the ages of the children, and the start date. What’s not included, often intentionally, is any mention of payroll, contracts, or taxes. And it doesn’t shock anyone. For many caregivers, listings like this are routine and understood as part of how the system operates. However, in nannying, the job isn’t just about hours and duties, it’s about how you get paid. On the books or off the books? W-2 or envelope? You won’t see it on job boards or agency websites, but on Facebook, in local groups and comment threads, this is one of the most common dilemmas nannies face: "Do they pay on or off the books?"

Some nannies want contracts, taxes, and job security. Others want flexibility, higher take-home pay, or they simply can’t risk official paperwork because of their immigration status. The same goes for families. Some insist on payroll and tax compliance. Others quietly prefer to pay cash.

What "On the Books" and "Off the Books" Actually Mean

On the books: You’re officially employed. Taxes are withheld. You receive a W-2 at the end of the year. You qualify for unemployment if you’re let go, and your job counts toward Social Security and credit.

Off the books: You’re paid in cash, Zelle, or Venmo. No taxes are withheld. You may not have a contract, and your income doesn’t show up when applying for unemployment, health insurance, or loans.

Some nannies live in the gray zone: part of their pay is reported, part isn’t. Some are 1099 contractors (often incorrectly), and others start "off" with the promise to transition later. These blurred lines are incredibly common.

The Legal Picture: What Off-the-Books Means for Nannies

• No unemployment benefits if you're fired or laid off.
• No worker's comp if you're injured on the job.
• No legal protections under Domestic Workers' Bills of Rights (e.g. paid sick days, protection from harassment).
• No paper trail to prove hours, pay, or employment if something goes wrong.
• No contribution to Social Security or Medicare.

But here’s what legal doesn’t guarantee either: that the family will follow the rules, pay overtime, or give raises. Plenty of legal jobs have loopholes or weak enforcement.

Why Nannies Sometimes Prefer Off-the-Books

Many nannies don’t just accept off-the-books jobs, they actively choose them. Why?

• Higher take-home pay (no taxes taken out means more money now)
• Medicaid or other income-based aid (reporting too much income can disqualify them)
• Student aid for kids or self (reported income can hurt FAFSA outcomes)
• Immigration status (some caregivers are undocumented, on expired visas, or transitioning from au pair programs)
• Using nannying as a stepping stone, not a long-term career (e.g. while in college, saving money, or between careers)

Why Families Choose Off-the-Books Too

• Avoid employer taxes (about 10–15% extra for Social Security, Medicare, etc.)
• No overtime requirements (legal jobs owe 1.5x over 40 hours/week)
• Flexible termination (no legal obligations or severance expectations)
• Lower total cost (families can offer $20/hr cash vs $30+/hr on payroll)

Some families are well-meaning but unaware. Others know the rules and avoid them intentionally.

Agencies vs. the Reality of the Online Market

Agencies often draw a hard line: on-the-books only. They also often require several years of experience and glowing references, which many caregivers don’t yet have when starting out. That’s why some begin as babysitters or part-time off-the-books nannies: to build trust, get reviews, and learn what’s considered fair pay. Agencies may offer perks like healthcare reimbursements (HRAs) or monthly stipends to offset the fact that nannies must buy their own health insurance. These are often advertised as benefits, but they’re also a workaround, since few families offer true health plans. But when you go looking online, it’s often families, not nannies, posting about this divide. Parents in Reddit threads frequently express frustration that candidates won’t accept on-the-books jobs.

"It’s super hard, I would say I lose 80-90% of candidates when I say I pay on the books, and that’s been consistently true for nannies we’ve hired over the past 8 years."
— Reddit user, r/NannyEmployers, January 25, 2025

"The vast majority (like 90%) of the ones were interviewing who have stellar recommendations want to be off the books. We are happy to pay on the books and overall would prefer it but so many great nannies don’t want it."
— Reddit user, r/nycparents, July 25, 2024

These comments reflect a disconnect between what agencies and experts recommend and what actually happens in the informal job market. For families who want to follow the rules, the lack of willing candidates can feel isolating. For nannies, choosing off-the-books often reflects practical realities, balancing public benefits, student aid, immigration status, or unpredictable job markets.

The Mixed Model: Half-On, Half-Off

Some families try to split income: pay half on the books and the rest in cash. This allows nannies to still show some income for rent or benefits, while keeping take-home higher. This is technically illegal, but widely done.

Why Some Nannies Prefer On-the-Books Work

Not every nanny avoids the system, many actively seek legal employment for the benefits it provides. Some reasons include:

• Unemployment eligibility during gaps in work
• Health insurance access through ACA subsidies
• Credit-building opportunities like leases and loans
• Retirement savings via Social Security credits
• Legal protection and clear boundaries in disputes

Why Some Families Prefer Legal Employment

While many families go off the books, some choose to pay legally because:

• Legal compliance to avoid risk and stay “by the book”
• Tax deductions through Dependent Care FSAs
• Fair employment practices as a matter of principle
• Household protection with worker’s comp and liability coverage

These families may also want the structure of a contract, clear expectations, and to be part of building a nanny’s long-term financial future.

The Risks Are Real. So Are the Reasons.

Instead of asking who’s right, maybe we should be asking why off-the-books work is so normalized in the first place. Why are there so many built-in incentives to stay off the books?

If you’re on Medicaid and managing a chronic condition like diabetes, reporting income might mean losing your health coverage. If you’re in school, off-the-books pay might be the only way to afford tuition by qualifying for aid. If you file taxes jointly with a spouse, even a modest increase in reported earnings could bump your household into a higher tax bracket or disqualify you from benefits that are essential for your family's survival.

There are countless stories like these, and no one-size-fits-all answer. What they reveal is a system where working under the table isn't always about avoidance, but adaptation. And perhaps the better question isn’t why so many nannies choose this path, but what might happen if the system gave them fewer reasons to.

Feeling lost? Check our Resource Guide that shows how reporting income affects Medicaid, FAFSA, ACA subsidies, and joint tax filing for real-world caregiving families.