Question 1

Do I really need to pay these taxes?

Accepted Answer

If you pay a household employee above the annual threshold ($3,000 for 2026), the IRS requires you to withhold and pay these taxes. It's the law, but it's also protection for your nanny—they'll have Social Security credits and unemployment insurance if they ever need it.

Question 2

What if I've been paying under the table?

Accepted Answer

It's not too late to start doing things right. Many families come to us after realizing they need to get compliant. We can help you figure out your next steps and get on track going forward.

Question 3

Why do the rates vary by state?

Accepted Answer

Each state sets its own unemployment insurance rate. California's is different from Texas, which is different from New York. We keep track of all 50 states for you so you don't have to.

Question 4

What's the difference between employer taxes and withholdings?

Accepted Answer

Employer taxes are what you pay on top of wages—Social Security, Medicare, and unemployment. Withholdings come out of your nanny's paycheck for their income taxes. You're responsible for both, but one is your cost and one is theirs.

Question 5

How accurate is this calculator?

Accepted Answer

This calculator uses the same tax rates and formulas we use in our payroll software. Federal rates (Social Security at 6.2%, Medicare at 1.45%, FUTA at 0.6%) are set by the IRS. State rates are pulled from official state labor department sources. For individual circumstances like multiple jobs or special withholding requests, consult a tax professional.

Question 6

What is the Social Security wage base?

Accepted Answer

For 2026, Social Security tax only applies to the first $184,500 of wages. If your nanny earns more than that (which would be uncommon for household employees), you'd stop paying Social Security tax on wages above that amount. Medicare has no wage cap—it applies to all wages.

Question 7

How does FUTA (federal unemployment) work?

Accepted Answer

You pay 6% federal unemployment tax (FUTA) on the first $7,000 of wages per employee. However, you get a 5.4% credit if your state has an approved unemployment program, so most employers effectively pay 0.6%. That's just $42 per employee, per year—paid entirely by you, not withheld from your nanny.

Question 8

What about overtime calculations?

Accepted Answer

This calculator assumes regular hourly pay. If your nanny works over 40 hours per week, federal law (and most states) require you to pay 1.5x their regular rate for overtime hours. Overtime wages are taxed the same way as regular wages—no different tax rates apply.

Question 9

Can I use this calculator for other household employees?

Accepted Answer

Yes! These tax calculations apply to any household employee: nannies, housekeepers, senior caregivers, personal assistants, private nurses, and more. If they work in your home and you control their schedule and how they do their job, they're a household employee.

Question 10

How do I calculate taxes if I have employees in multiple states?

Accepted Answer

If you have employees in different states (like a nanny in your main home and a caregiver at a vacation property), you pay each state's unemployment tax based on where the work is performed. Select each state separately in the calculator to see the different rates. Federal taxes (Social Security, Medicare, FUTA) stay the same regardless of state.

Question 11

Can I give my nanny a 1099 instead of a W-2?

Accepted Answer

No. Under IRS Publication 926, household workers are classified as W-2 employees if you control when, where, and how they work — which applies to nearly all nannies, housekeepers, and caregivers. Issuing a 1099 to avoid employer taxes is misclassification and can lead to penalties, back taxes, and interest from both the IRS and your state.

Question 12

What is Schedule H and do I need to file it?

Accepted Answer

Schedule H (Form 1040) is how you report household employment taxes to the IRS. You need to file it if you paid a household employee $3,000 or more in 2026. It covers Social Security, Medicare, FUTA, and federal income tax withholding. You file it with your personal tax return — there's no separate business return needed.

Question 13

How do I generate a W-2 for my nanny?

Accepted Answer

You're required to provide your employee a W-2 by January 31 of the following year. Copy A goes to the Social Security Administration (SSA). You can file online through BSO (Business Services Online) or use payroll software. NannyKeeper generates the completed W-2 forms for you — you just print and file.

	7.65% each	Social Security (6.2%, capped at $184,500 in 2026) + Medicare (1.45%, no cap), split between you and your employee.
	0.6%	Federal unemployment on the first $7,000 of wages. Employer-only.
	Varies	Each state sets its own rate and wage base. Some also require disability insurance.

	7.65% each	Social Security (6.2%, capped at $184,500 in 2026) + Medicare (1.45%, no cap), split between you and your employee.
	0.6%	Federal unemployment on the first $7,000 of wages. Employer-only.
	Varies	Each state sets its own rate and wage base. Some also require disability insurance.

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State nanny tax calculators

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