A private caregiver may quote $20/hour against an agency's $34 — but the sticker price isn't the real price. Here's what that gap actually buys, and what you take on as a household employer.
Search any Austin neighborhood group and you'll find the same question: "Anyone know a private caregiver? Agencies want $34/hour and Maria charges $20." The hourly difference is real. What the neighborhood post never mentions is what that $14 gap actually buys — and what you take on when you become a household employer. We're an agency, so read this knowing our perspective; but the facts below are the ones families tell us they wish they'd known earlier.
The IRS is clear: a caregiver working in your home, on your schedule, under your direction is almost always a household employee — not an independent contractor, no matter what anyone agrees to on a handshake. That means the family is responsible for:
Families who pay cash "under the table" avoid the paperwork but compound the risk: no workers' comp, no unemployment record, and tax exposure if it surfaces later — which it often does when a caregiver files for unemployment or Social Security.
No backup. This is the one families underestimate most. When a private caregiver is sick, has a family emergency, or quits — and turnover in caregiving is high everywhere — coverage is now your emergency, at 6 a.m., on a workday. An agency's job is to staff the shift anyway.
No screening infrastructure. A licensed Texas agency runs background checks, verifies eligibility to work, checks the state's Employee Misconduct Registry and nurse aide registry, and carries bonding against theft. Most families hiring privately check none of these — they check a neighbor's recommendation.
No supervision or escalation. Agencies document care, supervise caregivers, and adjust the care plan as needs change. With private hire, quality control is whichever family member lives closest — usually the one already stretched thinnest.
Do the honest math on that $20/hour private caregiver: add roughly 10% employer taxes, a workers' comp or umbrella policy, and occasional agency fill-in shifts at rack rates when she's unavailable, and the real number lands in the mid-to-high $20s — before pricing a single hour of your own time spent scheduling, supervising, and covering gaps. The agency premium buys screening, insurance, supervision, payroll compliance, and a bench of backup caregivers. Whether that's worth it depends on your family — but compare real numbers, not sticker prices. (Current agency rates are in our Austin cost guide.)
It's not never. A long-tenured caregiver who's become like family, a family able to run legal payroll (household-payroll services make this manageable), a light schedule with low physical risk, and relatives nearby to cover gaps — that can work well, and some families do it successfully for years. If you go that route: put the arrangement in writing, run real payroll, add liability coverage, and do a proper background check. Our guide on questions to ask a home care agency doubles as a checklist of what to verify about any caregiver, agency or not.
What families are really asking for in that neighborhood post is agency reliability at a fair price. That's the comparison worth making directly: tell us the schedule you need and get a real quote. Sometimes a well-designed agency schedule costs less than the private arrangement a family was piecing together — and every hour of it is insured, supervised, and guaranteed to be staffed. See how to choose an agency for what to look for in any provider, including us.
Paying wages isn't illegal — failing to withhold and report household employment taxes is. Above the IRS annual threshold, the family owes Social Security and Medicare taxes and must issue a W-2.
Agencies providing personal assistance services must hold a Texas HHSC home and community support services agency (HCSSA) license, which brings training, screening, and supervision requirements.
At minimum: a criminal history check, the Texas Employee Misconduct Registry, the nurse aide registry, a driving record if she'll transport your parent, and work eligibility verification.
Yes, and it's common — usually after a coverage gap or an injury scare. Agencies can often start care within days.