A private caregiver is someone you hire directly to provide hands-on help at home, without going through a home care agency. You find, interview, pay, and manage them yourself. This arrangement gives you more control over who provides care and often costs less than agency rates, but it also means you take on the responsibilities of being an employer, from taxes to insurance to writing a clear job agreement.
What a Private Caregiver Actually Does
The role covers a wide range of daily tasks, and the exact mix depends on what the person receiving care needs. At the core are basic activities of daily living: bathing, eating, using the bathroom, getting dressed, and moving from place to place. A caregiver might help someone transfer from a bed to a wheelchair, assist with grooming, manage diapering or bowel and bladder care, or administer medication.
Beyond personal care, many private caregivers handle household tasks that keep a home running. Meal preparation, grocery shopping, laundry, light cleaning, changing bed sheets, running errands, and coordinating transportation are all common. Some caregivers also provide companionship: going for walks, scheduling appointments, facilitating social activities, or simply being someone to talk to. The U.S. Department of Labor’s sample employment agreement for home care workers lists all of these as standard duties that should be spelled out before work begins.
Private Caregiver vs. Agency Caregiver
When you hire through an agency, the agency is the employer. They recruit, screen, train, and insure the caregiver. They handle payroll, provide a backup if your caregiver calls in sick, and carry liability coverage. You pay the agency a rate that covers all of this overhead.
When you hire privately, you cut out that middleman. You gain the ability to choose exactly who enters your home, negotiate pay directly, and build a longer-term relationship with one consistent person. The tradeoff is that every responsibility the agency would handle now falls on you. There is no automatic substitute if your caregiver is unavailable, no built-in liability insurance, and no HR department resolving disputes. You are the employer in every legal sense.
Your Tax Obligations as a Household Employer
Hiring a private caregiver makes you a household employer under IRS rules, and that comes with real tax obligations. If you pay a single household employee $3,000 or more in cash wages during the year (the threshold for 2026, though it can shift slightly year to year), you are generally required to withhold 6.2% for Social Security and 1.45% for Medicare from their wages. That totals 7.65%, and you owe a matching 7.65% from your own funds on top of it.
You report these taxes by filing Schedule H along with your personal income tax return (Form 1040). This is sometimes called the “nanny tax,” though it applies equally to caregivers, housekeepers, and other household employees. Skipping this step can result in penalties and back taxes, so it’s worth setting up correctly from the start, either on your own or with help from a payroll service that specializes in household employment.
Screening and Background Checks
Agencies vet their workers before sending them to your home. When you hire privately, that screening is your responsibility. A thorough background check typically includes a criminal history search, which can be run at the state level or, for more comprehensive results, through fingerprint-based FBI records. Some states have formal processes for this. Connecticut, for example, requires fingerprint submissions to the Department of Public Safety, which forwards them to the FBI and returns a nationwide criminal history record. Applicants can be disqualified if they’ve been convicted, incarcerated, or on probation within the past three years for certain offenses.
Beyond criminal records, it’s worth verifying references from previous families, confirming any certifications the caregiver claims to hold, and checking their driving record if they’ll be transporting your loved one. You can request these checks yourself through commercial background check services, many of which are designed for household employers and cost between $30 and $100.
Insurance You Need to Consider
One of the biggest risks of hiring privately is liability. If your caregiver is injured on the job, or if they accidentally damage property or injure the person in their care, the financial exposure falls on you unless you have the right coverage in place.
Two types of insurance matter most. General liability insurance covers claims for physical injury and property damage that happen in the course of the caregiver’s work. Professional liability insurance (sometimes called errors and omissions coverage) protects against claims of negligence or mistakes in the care itself. Workers’ compensation insurance is required in most states when you have an employee, and it covers medical bills and lost wages if your caregiver gets hurt or becomes ill because of the job. Even in states where it isn’t strictly required for a single household employee, carrying it protects you from a potentially devastating lawsuit. Check your state’s specific requirements, as penalties for noncompliance can be severe.
Your existing homeowner’s insurance policy may offer some coverage for injuries on your property, but it rarely covers an employee in the way workers’ comp does. It’s worth calling your insurer to understand the gaps.
Writing a Caregiver Agreement
A written contract protects both sides and prevents the kind of misunderstandings that erode a caregiving relationship. The Department of Labor publishes a sample employment agreement for home care workers that covers the key elements.
The most important section is scope of care. List every task the caregiver is expected to perform, from assisting with transfers and bathing to preparing meals and providing transportation. Be specific. If you need help with pet care or light cleaning, spell it out. If certain tasks are off-limits, note that too. A clear scope prevents the job from gradually expanding beyond what was agreed upon.
Other essential clauses include:
- Schedule and pay rate: Hours per day, days per week, overtime expectations, and how and when payment happens.
- Transportation and mileage: Whether the caregiver will drive the care recipient, and what reimbursement or allowance covers fuel and wear on their vehicle.
- Termination notice: How many weeks of notice either party must give before ending the arrangement, whether severance pay applies (for example, one week per year of service), and what situations justify immediate termination without notice.
- Time off and sick days: Paid or unpaid vacation, holidays, and what happens when the caregiver is unavailable.
Both parties should sign the agreement and keep a copy. It doesn’t need to be drafted by a lawyer to be useful, though legal review is reasonable if the arrangement is complex or involves live-in care.
How Government Programs Can Help Pay
Medicare does not pay for a private caregiver you hire independently. Its home health benefit covers skilled nursing and therapy services ordered by a doctor and delivered by a certified agency, not the kind of ongoing personal care most families need.
Medicaid is more flexible, though it varies significantly by state. Many states offer Home and Community Based Waivers that allow the care recipient to hire someone of their choosing, sometimes including a relative or friend, as a paid caregiver. Kentucky, for example, runs a Consumer Directed Option under its waiver program that lets participants hire a family member to provide care. Its Michelle P. Waiver extends similar flexibility to people with intellectual or developmental disabilities. Some states also operate non-Medicaid programs for residents with disabilities, covering personal care attendants, respite care, and home modifications.
To find out what’s available where you live, contact your state’s Area Agency on Aging or Medicaid office. Eligibility typically depends on income, the level of care needed, and whether the person qualifies for a specific waiver program. Wait lists are common for these programs, so applying early matters.
Where to Find a Private Caregiver
Without an agency doing the recruiting, you’ll need to search on your own. Online platforms like Care.com and CareLinx connect families with independent caregivers and often include profile reviews, background check tools, and messaging systems. Local community boards, religious organizations, and senior centers are also reliable sources, particularly for finding caregivers who already live nearby.
Word of mouth remains one of the strongest channels. Other families who have hired privately can share honest assessments of a caregiver’s reliability, temperament, and skill. If the person you’re caring for has a medical team, their social worker or discharge planner may also have recommendations. However you find candidates, plan to interview at least three, ask for and actually call references, and do a trial period before committing to a long-term arrangement.