{"id":16642,"date":"2018-11-09T10:00:18","date_gmt":"2018-11-09T15:00:18","guid":{"rendered":"https:\/\/gtm.com\/household\/?p=16642"},"modified":"2020-04-06T11:09:03","modified_gmt":"2020-04-06T15:09:03","slug":"use-a-nanny-tax-calculator","status":"publish","type":"post","link":"https:\/\/gtm.com\/household\/use-a-nanny-tax-calculator\/","title":{"rendered":"Use a Nanny Tax Calculator for these 5 Helpful Tasks"},"content":{"rendered":"
\"use

When you use a nanny tax calculator, you can figure a number of helpful calculations.<\/p><\/div>\n

For families hiring a household employee, figuring out tax obligations and pay rates can be the most complicated parts of the process. That\u2019s where a nanny tax calculator<\/a> can be a valuable resource. Here are five helpful ways to use a nanny tax calculator.<\/p>\n

1. Estimate Your Tax Obligation<\/h2>\n

When budgeting for a nanny, it helps to figure out your employer tax responsibility. This is money you\u2019ll pay to state and federal governments on top of what you pay your nanny and any benefits you provide. You will owe Social Security and Medicare taxes and federal and state unemployment insurance taxes.<\/p>\n

When using GTM\u2019s nanny tax calculator<\/a>, complete the employee and employer information on the \u201cGross v. Net\u201d tab of the nanny tax calculator and click \u201cCalculate What I\u2019ve Entered.\u201d The results page will show your employer taxes per pay period and for the calendar year as well as your total employer responsibility, which is your nanny\u2019s wages plus your tax obligations.<\/p>\n

The nanny tax calculator will also determine estimated tax savings from the Child & Dependent Care Tax Credit.<\/p>\n

2. Calculate Your Employee\u2019s Withholdings<\/h2>\n

Enter your nanny\u2019s federal and state withholding statuses, federal allowances, and any relevant local tax jurisdiction. The calculator will show your employee\u2019s tax obligation and take-home pay.<\/p>\n

3. Determine Your Estimated Tax Savings from an FSA<\/h2>\n

Your employer-sponsored Flexible Spending Account (FSA) can be used to help pay your nanny\u2019s wages and\/or your employer tax responsibility. By entering additional information about your federal and state tax filings and your pre-tax FSA contribution, you\u2019ll see your estimated tax savings when you file your personal return.<\/p>\n

4. Convert Gross Pay to Net Pay<\/h2>\n

You\u2019ll set your nanny\u2019s wages based on gross \u2013\u2013 or before-tax \u2013\u2013 pay. However, your nanny may want to know what their net pay \u2013\u2013 or take-home pay \u2013\u2013 will be. Following the same steps under \u201cEstimate Your Tax Obligation,\u201d you can show your nanny their take-home pay for a pay period and calendar year.<\/p>\n

5. Translate a Salary to Hourly and Overtime Rates<\/h2>\n

When determining how much you want to pay a nanny, you may have come up with a weekly amount. However, nannies are required by law to be paid hourly and not a salary<\/a>. They also receive at least time-and-a-half for overtime, which is typically hours worked over 40 in a week. There may be some exceptions around live-in employees and companionship care.<\/p>\n

On the nanny tax calculator, click the \u201cSalary v. Overtime\u201d tab. Enter the hours your nanny will work each week and their weekly gross salary. The results page will break down your nanny\u2019s weekly gross pay into a standard rate for the first 40 weekly hours and, if applicable, an overtime rate for any hours over 40.<\/p>\n

Need Additional Assistance? GTM Can Help.<\/h2>\n

As you can see, a nanny tax calculator can be a powerful tool for you and your nanny to determine wages, tax obligations, and tax savings. But you may have questions about household employment that go beyond tax and pay calculations. Feel free to call us at (800) 929-9213 and we’ll answer your questions and review your hiring situation at no charge and with no obligation.<\/p>\n

* GTM\u2019s nanny tax calculator is provided as a means for obtaining an estimate of tax liabilities but should not be used as a replacement for formal calculations and does not constitute the provision of tax or legal advice. The user assumes all responsibility and liability for its use.<\/p>\n","protected":false},"excerpt":{"rendered":"

For families hiring a household employee, figuring out tax obligations and pay rates can be the most complicated parts of the process. That\u2019s where a nanny tax calculator can be a valuable resource.<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[2,76,75],"tags":[240,239,44],"class_list":["post-16642","post","type-post","status-publish","format-standard","hentry","category-gtmblog","category-hiring-an-employee","category-household-payroll-taxes","tag-flexible-spending-account","tag-nanny-tax-calculator","tag-overtime"],"yoast_head":"\n5 Answers You Need When Using a Nanny Tax Calculator<\/title>\n<meta name=\"description\" content=\"Figuring out tax obligations and pay rates can be complicated when hiring a household employee. 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