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Everything you need in one place

TAXES

Taxes filed on time, every time —
100% guaranteed*.

PAYROLL

Set your payroll once and forget it.

BENEFITS

Health insurance, 401k plan, and
other employee benefits

What parents like you are saying

FAQs

Do I need to pay nanny taxes?
Yes. As a household employer, if you pay cash wages of $2,200 or more in 2020 (or $2,100 in 2019) to your employee, you must withhold Social Security and Medicare taxes. Employers are not required to withhold Federal and State income taxes unless it is agreed upon by both parties.

If income taxes are not withheld throughout the year, your nanny will be responsible for paying them at the end of the year. If you pay a total of $1,000 or more per quarter to a household employee you must pay federal unemployment tax. This does not apply if your household employee is your spouse, child under age 21, parent, or any employee under the age of 18 at any time in the current tax year.

How much will I owe in nanny taxes?
You are responsible for paying 7.65 percent of your employee’s gross pay in Social Security and Medicare taxes, which you can remit quarterly. Your employee will be responsible for the same amount, which can be withheld from their pay each pay period. Each of you will pay 6.2 percent towards Social Security and 1.45 percent to Medicare. Your employee will also owe income tax.

You will also pay FUTA (unemployment tax), which is six percent of wages up to $7,000 in earnings. Your employee is not responsible for this tax.

What happens if I fail to pay nanny taxes?
Not paying payroll taxes could result in hefty fines and penalties, and possible legal action by your employee. It’s not that difficult to get caught. Your nanny files for unemployment, gets hurt on the job, or sues you for not withholding taxes. Paying your nanny “under the table” and getting caught could also trigger an IRS audit. Not paying proper taxes can also derail career opportunities and not just for government positions. For jobs that require a government security clearance, you’ll be asked if you failed to pay any taxes when required by law.

FAQs

Do I need to pay nanny taxes?
Yes. As a household employer, if you pay cash wages of $2,200 or more in 2020 (or $2,100 in 2019) to your employee, you must withhold Social Security and Medicare taxes. Employers are not required to withhold Federal and State income taxes unless it is agreed upon by both parties.

If income taxes are not withheld throughout the year, your nanny will be responsible for paying them at the end of the year. If you pay a total of $1,000 or more per quarter to a household employee you must pay federal unemployment tax. This does not apply if your household employee is your spouse, child under age 21, parent, or any employee under the age of 18 at any time in the current tax year.

How much will I owe in nanny taxes?
You are responsible for paying 7.65 percent of your employee’s gross pay in Social Security and Medicare taxes, which you can remit quarterly. Your employee will be responsible for the same amount, which can be withheld from their pay each pay period. Each of you will pay 6.2 percent towards Social Security and 1.45 percent to Medicare. Your employee will also owe income tax.

You will also pay FUTA (unemployment tax), which is six percent of wages up to $7,000 in earnings. Your employee is not responsible for this tax.

What happens if I fail to pay nanny taxes?
Not paying payroll taxes could result in hefty fines and penalties, and possible legal action by your employee. It’s not that difficult to get caught. Your nanny files for unemployment, gets hurt on the job, or sues you for not withholding taxes. Paying your nanny “under the table” and getting caught could also trigger an IRS audit. Not paying proper taxes can also derail career opportunities and not just for government positions. For jobs that require a government security clearance, you’ll be asked if you failed to pay any taxes when required by law.
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