We use Intuit Payroll services. It's under $10 per month through Costco. It's a regular payroll service so not a nanny tax service per se. But once you have it set up it's quite easy & generated W-2s & such. It does not cover state unemployment taxes, though I've always found that easy enough to figure out on my own.
This all takes more time than a full service but saves a ton of money.