Only 2 or 3 of my households have a live in butler. All have their private bedroom, which is normally equipped with stuff that the butler really don'rt need, and never use. Like a desk, books to read,...
I only have a couple butlers in my game - but they are treated like family- as much as the game allows anyway. They have their own comfy and roomy bedroom with a sitting and reading area and a nice private bathroom.