Nanny Tax Calculator

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Reviewer: David Chen, CPA (Certified Public Accountant). Verified accuracy of tax rates and thresholds (2024 standards).

The Nanny Tax Calculator estimates the annual Federal employment taxes (FICA and FUTA) you, as a household employer, are responsible for paying based on the gross wages provided to your nanny or household employee.

Nanny Tax Calculator

Estimated Annual Employer Tax Liability

$0.00

This is the amount you owe as the employer.

Nanny Tax Calculator Formula

Nanny Tax (Employer Share) = (Employer FICA Tax) + (FUTA Tax)

Employer FICA Tax = Max(Annual Wages, 0) x 7.65% (If Annual Wages > $2,700)

FUTA Tax = Min(Annual Wages, $7,000) x 0.6%

Formula Source: IRS Publication 926 – Household Employer’s Tax Guide | Social Security (FICA) Information

Variables

  • Annual Gross Wages Paid to Nanny: The total cash wages you expect to pay your employee during the calendar year. This is the primary input for determining tax liability.
  • FICA Threshold: The minimum annual wage amount that triggers the requirement to withhold and pay FICA taxes (Social Security and Medicare). For 2024, this threshold is $2,700.
  • FUTA Wage Base: The maximum amount of an employee’s wages that is subject to Federal Unemployment Tax (FUTA). For 2024, the FUTA wage base is $7,000.

Related Calculators

What is Nanny Tax?

The “Nanny Tax” refers to the payroll and unemployment taxes that a household employer must pay if they employ domestic workers, such as nannies, housekeepers, or senior caregivers. These taxes primarily consist of Social Security and Medicare taxes (FICA), and Federal Unemployment Tax (FUTA).

As an employer, you are generally responsible for paying the employer’s share of FICA (7.65% of the employee’s wages) and the FUTA tax (a small percentage on the first $7,000 of wages). You may also be required to withhold the employee’s share of FICA (another 7.65%) and any agreed-upon Federal Income Tax. Failure to properly pay Nanny Taxes can result in penalties and interest from the IRS.

How to Calculate Nanny Tax (Example)

  1. Determine Gross Wages: First, calculate the annual cash wages. For example, a nanny working 20 hours/week at $25/hour receives $26,000 annually.
  2. Calculate FICA Tax: Check if the gross wages ($26,000) exceed the FICA threshold ($2,700 in 2024). Since it does, multiply the wages by the employer’s FICA rate (7.65%). $26,000 * 0.0765 = $1,989.00.
  3. Calculate FUTA Tax: Determine the taxable FUTA wage base, which is the lesser of the gross wages or the FUTA wage base ($7,000). In this case, use $7,000. Multiply this by the effective FUTA rate (0.6%). $7,000 * 0.006 = $42.00.
  4. Sum the Total Tax: Add the Employer FICA Tax and the FUTA Tax. $1,989.00 + $42.00 = $2,031.00. This is the estimated annual Nanny Tax (employer share).

Frequently Asked Questions (FAQ)

Do I have to pay Nanny Tax if my employee only works part-time?
Yes, if you pay any single household employee cash wages that total $2,700 or more (for 2024) in a calendar year, you are required to pay FICA and FUTA taxes.
What is the difference between FICA and FUTA?
FICA stands for Federal Insurance Contributions Act (Social Security and Medicare). FUTA stands for Federal Unemployment Tax Act, which funds unemployment benefits.
When are Nanny Taxes paid to the IRS?
Household employment taxes are reported and paid annually using Schedule H (Form 1040) when you file your personal federal income tax return.
Does this calculator include State Unemployment Tax (SUTA)?
No, this calculator focuses only on Federal taxes (FICA and FUTA). State Unemployment Tax (SUTA) rates vary significantly by state and must be calculated separately.
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