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The 2019 nanny tax threshold remains unchanged from last year.
The Social Security Administration recently released its 2019 nanny tax threshold. Next year’s coverage threshold for household employees remains at $2,100, which is unchanged from 2018.
If a nanny or other household employees like a housekeeper or an in-home senior caregiver, earn $2,100 or more in cash wages in 2019, Social Security and Medicare taxes, or “nanny taxes,” must be paid by the family and the employee.
A coverage threshold is the amount of earnings that triggers coverage under the Social Security program. Earnings below the threshold are not taxable under Social Security. For most workers, there is no coverage threshold; every dollar of their wages is covered and taxable. There is, however, a threshold for household employees, election officials/workers, self-employed workers, and farm workers.
The employment coverage threshold for household employees is adjusted for inflation and last increased by $100 last year to $2,100.
The nanny tax threshold does not apply to wages paid to a spouse, child under age 21, parent, or any employee under the age of 18.
Social Security and Medicare taxes are 15.3% of cash wages. The employer pays 7.65% (Social Security at 6.2% and Medicare at 1.45%) while the same amount can be withheld from the employee’s pay or the employer can pay their worker’s share and not withhold.
To understand your total nanny tax, wage, and payroll responsibilities, download The Complete Guide to Household Payroll or visit our Nanny Tax Guide. You can also use our Nanny Tax Calculator to determine your total employer tax obligation.
For more information on the 2019 nanny tax threshold, visit Employment Coverage Thresholds on the Social Security Administration website.
GTM Can Help
Get a free, no-obligation consultation with a household employment expert at (800) 929-9213. We’ll explain your tax, payroll, insurance, and compliance obligations under federal and state laws as well as answer any questions you have about your employment situation.
