The real cost comparison
Private caregivers in the Las Vegas Valley commonly charge somewhere in the high teens to mid twenties per hour. Agency rates run about 32 to 42 dollars depending on the level of care. That gap looks enormous until you list what the agency rate actually includes:
| What it covers | Private hire | Agency |
|---|---|---|
| Caregiver wages | You pay directly | Included |
| Employer payroll taxes (Social Security, Medicare, unemployment) | Your responsibility | Included |
| Workers' compensation insurance | Your responsibility | Included |
| Liability and theft bonding | Your responsibility | Included |
| Background and reference checks | You arrange and pay | Included |
| Backup when the caregiver is sick or quits | You scramble | Guaranteed replacement |
| Nurse supervision and a written care plan | Not included | Included |
| Training, including dementia-specific | Whatever they arrived with | Agency responsibility |
Add the employer costs to a private wage and the true gap narrows considerably. It rarely closes completely, so be clear-eyed: private hire usually is somewhat cheaper in cash. The question is whether the savings are worth the risk and the administrative load in your specific situation.
The part most families do not know: you become an employer
If you set the schedule and direct how the work is done, the caregiver is generally your household employee, not an independent contractor, whatever you agree to call it. Once you pay a household employee more than the IRS annual threshold (a figure adjusted each year, so confirm the current one), you are responsible for:
- Withholding and paying Social Security and Medicare taxes
- Federal unemployment tax, and Nevada state requirements including new hire reporting
- Issuing a W-2 at year end
- Carrying appropriate insurance for someone working in the home
Handing over cash each week does not make these obligations disappear. Many families use a household payroll service to handle this properly, which adds cost but removes the exposure.
Three risks worth pricing in
- Injury in the home. If a private caregiver hurts their back transferring your parent, and there is no workers' compensation, that can become a claim against the homeowner. Homeowners policies frequently exclude or limit employee injuries. This is the single biggest financial exposure of private hire.
- Long-term care insurance. Many policies reimburse only care delivered by a licensed agency, and some require it for days to count toward the elimination period. Hiring privately can quietly void a benefit you have paid premiums on for decades. Check the policy first.
- Medicaid look-back. Informal payments, especially to a relative, without a written care agreement and payroll records can be treated as gifts if your parent later applies for long-term care Medicaid, creating a penalty period. If Medicaid is anywhere in the future, document it properly now. If the caregiver is a family member, there is often a better route: getting paid legally as a family caregiver in Nevada.
The coverage problem nobody plans for
A private caregiver is one person. When they are sick, take a holiday, have a family emergency or simply quit, coverage is your problem, usually at short notice. For a few hours of companionship a week that is an inconvenience. For a parent who cannot safely be alone, or who needs help transferring to the toilet, it is a crisis. Ask yourself honestly who covers the Tuesday your caregiver wakes up with the flu.
When hiring privately genuinely makes sense
We would rather you make a good decision than an expensive one. Private hire is often the right answer when:
- You already know and trust the person, for example someone who cared for another family member
- The needs are light and stable: company, meals, errands, a few hours a week
- Family lives nearby and can cover gaps at short notice
- There are no medical needs, no dementia, and no fall risk that requires trained handling
- You are willing to run payroll properly and carry the right insurance
Conversely, an agency earns its rate when there are medical needs, dementia or behavioral challenges, heavy or overnight schedules, a recent hospital discharge, family managing from out of state, or an insurance policy that requires licensed care.
Is it cheaper to hire a caregiver privately?
Per hour, yes, often noticeably. Once you add the employer payroll taxes, workers' compensation and liability coverage, background checks, and the cost of covering shifts when your caregiver is sick or quits, much of that gap closes. The honest summary is that private hire is usually still somewhat cheaper in cash terms, and you are paying the difference in risk, admin and your own time.
Am I legally the employer if I hire a caregiver directly?
In most cases yes. If you control the schedule and how the work is done, that person is generally your household employee, not an independent contractor, regardless of what you call them. Once you pay a household employee more than the annual IRS threshold, you are responsible for Social Security and Medicare taxes, federal unemployment tax, a W-2, and Nevada new hire reporting. Paying cash under the table does not remove the obligation, it just leaves it unmet.
What happens if a private caregiver gets hurt in my parent's home?
That is the risk most families never think about. Without workers' compensation coverage, an injury to someone working in the home can become a claim against the homeowner, and standard homeowners policies often exclude or limit employee injuries. An agency carries workers' compensation and liability coverage on its own employees, which is a large part of what the higher hourly rate buys.
Will long-term care insurance pay for a private caregiver?
Frequently not. Many long-term care policies only reimburse care delivered by a licensed agency, and some also require agency-provided care for the days to count toward the elimination period. If your family holds a policy, read the provider requirements before hiring privately, because using an independent caregiver can leave a claim unpaid.
Can paying a caregiver under the table affect Medicaid eligibility?
It can. Money paid to a family member or an unofficial caregiver without a proper care agreement and payroll records may be treated as a gift during Medicaid's look-back review, which can create a penalty period when your parent later applies for long-term care Medicaid. If Medicaid may be in the future, document caregiving arrangements properly from the start.
Last reviewed August 2026. General information, not legal, tax or insurance advice. Tax thresholds and program rules change; confirm current figures with a tax professional or the relevant agency before acting.