Nanny Tax Calculator

How nanny taxes work in 2026

Hire someone to work in your home, and you are an employer. Not a business, but an employer, and three federal taxes follow from that. Household employment differs from ordinary payroll in one way that catches people out: none of them start on day one. Each waits for a threshold, and the thresholds do not line up with each other.

• Social Security and Medicare (7.65% each side). Triggered by paying any one household employee $3,000 or more in cash wages during 2026, up from $2,800 in 2025. You withhold 6.2% and 1.45% from her pay and match both out of your own pocket. For the per-paycheck view of that math, the FICA tax calculator handles it.
• Federal unemployment (FUTA). Triggered separately by paying $1,000 or more in any single calendar quarter to all your household employees combined. Employer money only, nothing withheld. It runs 6.0% on the first $7,000 of wages, less a credit of up to 5.4% for state unemployment tax paid on time, so most families pay a net 0.6%, a maximum of $42 a year per person.
• Federal income tax withholding, which is optional. Publication 926 is direct about it: withhold only if your employee asks you to and you agree, and she has to give you a completed Form W-4. This is the piece that trips up families who reach for a business payroll calculator, since those assume withholding is mandatory.

Two thresholds, two different periods, two different scopes. The $3,000 test is annual and measured per employee. The $1,000 test is quarterly and measured across everyone who works in your home. They can and do disagree: a sitter paid $2,500 across one summer owes no Social Security or Medicare, but she does put you on the hook for FUTA, because $2,500 landed inside a single quarter. That is why the calculator above gives each test its own badge instead of one combined verdict.

State unemployment tax is a fourth piece, and it varies too much to guess at. The tool asks for your own rate and wage base; a built-in lookup table would just go stale. State income tax withholding is out of scope here entirely.

What the $3,000 threshold actually means

Here is the part most calculators get wrong. The $3,000 figure is a coverage threshold, and it behaves like a cliff. Once cash wages to one household employee reach $3,000 for the year, Social Security and Medicare apply to every dollar you paid her, right back to the first one. You never subtract $3,000 first.

Work the numbers. Pay a part-time sitter $58 a week for 50 weeks and you have paid $2,900. No Social Security, no Medicare, nothing to withhold. Pay her $60 a week over the same 50 weeks and you have paid $3,000. Now the full $3,000 is taxable: $229.50 withheld from her (6.2% plus 1.45%), and $229.50 matched by you. A $100 difference in wages creates a $459 tax bill. That is the cliff, and it is worth knowing about in November, when a few extra evenings of babysitting can push a year over the line.

Publication 926 also lists people whose wages never count toward the threshold, however much you pay them. Your spouse. Your child under age 21. Your parent, with narrow exceptions tied to caring for your own young child. And anyone under 18 during the year, unless household work is their principal occupation, which excludes a student who babysits between classes. Cash wages means cash, checks, and transfers. Meals and lodging provided for your convenience are not counted as wages here.

One more distinction worth being precise about. Reaching $3,000 does not mean you must withhold her half. You are allowed to pay both halves yourself, which plenty of families do. The share you cover becomes income to her for income tax purposes (it shows up in W-2 box 1), but it is not treated as additional Social Security or Medicare wages, so it does not compound. If your goal is a specific take-home figure instead, that is a gross-up, handled by the gross-up calculator.

Paperwork: W-2, Schedule H, and the pay stub

Household employers do not file Form 941 or Form 940. The whole year settles on your own personal return through Schedule H (Form 1040), which reports both halves of Social Security and Medicare, the FUTA you owe, and any income tax you withheld. Because it rides along with the 1040, the bill lands in April. Most families plan ahead, either by bumping up their own withholding at work or by sending in estimated payments during the year.

Alongside that, your nanny gets a Form W-2 by February 1, 2027 if she had $3,000 or more of Social Security and Medicare wages, or if you withheld any federal income tax at all. Copy A goes to the Social Security Administration with a Form W-3. You will need an EIN to file, and she will need to have completed a Form I-9. Sending a 1099 instead is the classic misclassification: if you control what work gets done and how, she is an employee, and calling her a contractor does not move the tax.

All of that only works if you keep a running record of what you paid and what came out. Publication 926 asks you to keep it for four years, and most states require you to hand your employee a wage statement at each payday regardless. It is also the document she needs when a landlord or a lender asks how she earns a living, and the proof of income calculator covers what those requests usually involve. For what belongs on that statement line by line, see how to make a pay stub for your nanny.

Payslip44 builds that record. Employer and employee details are saved as reusable templates, so you are not retyping an EIN every Friday. Each earning and deduction line carries its own year-to-date amount, which is exactly what Schedule H asks you to total in the spring. Money math runs to decimal precision, so 50 weekly stubs still tie to the annual figure. Everything stays on your device, and finished stubs export as PDF, PNG, CSV, or plain text. To build the earnings lines from hours and a rate, the hourly to paystub earnings calculator does that step. If you also employ people through a business, the employer payroll cost calculator covers the full employer burden on that side.

Know what you owe? Download Payslip44 and give your nanny a real pay stub.