Do I Need to Pay Nanny Taxes?

You’ve hired a nanny, in-home senior care worker, housekeeper or some other employee to work in your home. Do you need to pay “nanny taxes” on your household employee?

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You’ve hired a nanny, in-home senior care worker, housekeeper, or some other employee to work in your home.

Do you need to pay taxes on your household employee?

If you pay your employee $2,400 in a calendar year, you must pay what’s called FICA taxes, which is your contribution to Social Security and Medicare.

This is what’s commonly referred to as “nanny taxes.”

Also, if you pay an employee $1,000 or more in any calendar quarter, you’re liable for unemployment taxes as well.

Don’t count wages you pay to your spouse, a child under 21, a parent, or any employee under the age of 18.

Your tax responsibility is 7.65 percent of your employee’s cash wages for Social Security and Medicare.

Federal unemployment tax is six percent of cash wages up to $7,000 a year for each of your employees.

You may also owe state unemployment taxes.

You can remit your taxes quarterly to avoid paying your entire obligation at the end of the year.

To figure out what you and your employee will owe in taxes, use GTM’s free nanny tax calculator.

Don’t want to handle nanny taxes and payroll on your own?

GTM relieves the risks, hassles, and worries of nanny taxes and payroll for thousands of families like yours.

Call GTM at (800) 929-9213 and get a free, no-obligation consultation with a household employment expert.

We’ll be happy to help!