Nanny Tax Calculator (2026)
Estimate your real cost as a household employer — and your nanny's take-home pay — including Social Security, Medicare, and unemployment taxes.
How Nanny Taxes Work
When you pay a nanny $2,800 or more in a year, the IRS treats you as a household employer. That means you owe employment taxes and must give your nanny a W-2 — they're an employee, not an independent contractor. Here's what makes up the "nanny tax":
What you (the employer) pay on top of wages
- Social Security — 6.2% of wages (employer share).
- Medicare — 1.45% of wages (employer share).
- Federal unemployment (FUTA) — 0.6% on the first $7,000 (about $42/year).
- State unemployment (SUI) — typically 1–4% on a state wage base; varies widely.
What you withhold from the nanny's pay
- Employee FICA — 7.65% (their Social Security + Medicare share).
- Income tax — optional but common; based on the nanny's Form W-4.
You remit everything to the IRS (via Schedule H with your Form 1040) and your state. Learn the full process in our nanny taxes & payroll guide.
The Upside: Tax Breaks for Paying Legally
Paying your nanny on the books unlocks childcare tax benefits that often offset much of the employer tax:
- Dependent Care FSA — set aside up to $5,000 pre-tax. Estimate your savings.
- Child & Dependent Care Credit — up to $1,050 (one child) or $2,100 (two+). How it works.
See typical pay ranges in our nanny salary by state guide, or nanny costs by city.
Frequently Asked Questions
How much are nanny taxes?
As a household employer you pay about 10% on top of gross wages: 6.2% Social Security, 1.45% Medicare, 0.6% FUTA, plus 1–4% state unemployment. On a $40,000 salary that's roughly $4,000. Your nanny also has 7.65% FICA withheld from their pay.
What is the nanny tax threshold for 2026?
If you pay a household employee $2,800 or more in a year (the 2025 figure, adjusted annually), you owe Social Security and Medicare taxes and must issue a W-2. FUTA applies once you pay $1,000+ in any calendar quarter.
Who pays nanny taxes, the family or the nanny?
Both. The family pays the employer share of FICA (7.65%) plus unemployment taxes and withholds the employee share (7.65%) and any income tax from the nanny's check, then remits it all via Schedule H.
Can I pay my nanny as a 1099 contractor?
Almost never. The IRS classifies nannies as employees because you control their work, schedule, and how the job is done. Misclassifying a nanny as a 1099 contractor can lead to back taxes and penalties.
Compare Nanny Costs to Other Care
See how a nanny stacks up against daycare, a nanny share, and an au pair in your area — including tax savings.
Open the Cost Calculator