Nanny contract and pay method

We are hiring Nanny for the first time. It is going to be 35 hrs per week job for atleast next 3 months. What are the best ways to pay the nanny? Do i need to pull up a formal contract (nanny is ok without a formal contract)? Are there any contract and payroll companies that i should consider?
Would love any insights on how to pay the nanny and if it can help me in taxation? We live in Texas.