Nanny Tax Calculator

Do You Owe Nanny Tax? The 2026 Tests

IRS Publication 926 (2026) sets two separate tests for household employers:

• Social security and Medicare (FICA): you pay cash wages of $3,000 or more in 2026 to any one household employee. Once you cross it, all of that employee’s 2026 cash wages are taxed, not just the amount above $3,000.
• Federal unemployment (FUTA): you pay total cash wages of $1,000 or more in any calendar quarter of 2025 or 2026 to household employees. FUTA is 6.0% of the first $7,000 per employee, less a credit of up to 5.4% if you pay your state unemployment tax on time, for a net 0.6% ($42 a year at most per employee).

Household employees include nannies, babysitters, housekeepers, caregivers and private nurses who work in or around your home under your control, full or part time. Finding them through an agency doesn’t change that; what matters is who controls the work. If an agency controls what is done and how, or only the worker controls it (a self-employed worker with their own business), the worker isn’t your employee, and a sitter who cares for your child in their own home generally isn’t either.

Who Isn’t Counted

• Your spouse and your child under 21: no FICA, no FUTA.
• Your parent: no FUTA, and no FICA unless your parent cares for your child under 18 (or a child needing adult care) and you are divorced and not remarried, widowed, or living with a spouse who can’t care for the child.
• An employee under 18 at any time in 2026: no FICA unless household work is their principal occupation, which it never is for a student. Their wages still count for FUTA.

The Pub. 926 Example, Reproduced

Mary Brown pays Jane Oak $70 every Friday for 48 weeks: $3,360 in cash wages, over the $3,000 threshold. Jane’s share is $208.32 of social security tax (6.2%) and $48.72 of Medicare tax (1.45%), withheld from her pay, and Mary pays the same again, for a Schedule H total of $514.08. At $70 a week Mary never pays $1,000 in a quarter ($910 for a full 13 weeks), so no FUTA is due.

If you would rather pay the employee’s share yourself, the IRS example works it per payday: on $100 of wages you pay $15.30 ($7.65 for each share), and the employee’s wages for income tax become $107.65, because the share you cover counts as extra pay in box 1 of Form W-2.

2026 Nanny Tax at Different Pay Levels

The weekend babysitter earns $2,964, just under the $3,000 line, so no social security or Medicare is due, and $57 × 13 weeks is $741, under $1,000 in any quarter, so no FUTA either. At $77 a week ($1,001 a quarter, $4,004 a year) both would apply.

What You Have to File

1. Get an employer identification number (EIN), which goes on Form W-2 and Schedule H.
2. Withhold the employee’s 7.65% from each paycheck (or decide to pay it yourself). You don’t have to withhold federal income tax; do it only if the employee asks, you agree, and they give you a Form W-4.
3. By February 1, 2027: give the employee Form W-2 and send Copy A with Form W-3 to the Social Security Administration. It’s not required if you withheld no income tax and FICA wages were under $3,000.
4. By April 15, 2027: file Schedule H with your 2026 Form 1040. The tax is added to your income tax, so raise your own withholding or make estimated payments during the year to avoid an underpayment penalty.
5. Check your state’s unemployment tax and other employer rules; Pub. 926 points to the Labor Department’s list of state unemployment tax agencies.

Common Mistakes

• Taxing only the wages above $3,000. Once a worker reaches $3,000, every dollar of their 2026 cash wages is taxed.
• Paying a nanny as a contractor on Form 1099. A nanny who works in your home under your direction is your employee.
• Forgetting FUTA when FICA doesn’t apply. A teenage sitter paid $1,000 in a summer quarter triggers FUTA even though no FICA is due.
• Not planning for April. Schedule H tax is due with your return; without extra withholding it can trigger an estimated-tax penalty.

What This Calculator Does Not Cover

It assumes steady weekly pay of cash wages (noncash items like meals and lodging at your convenience aren’t wages for FICA). It does not calculate federal or state income tax withholding, state unemployment or disability taxes, or the dependent care FSA and child care credit that can offset some costs; see the dependent care FSA calculator for that.

Frequently Asked Questions

How to Use This Calculator

1. Enter weekly cash wages and weeks — what you pay in cash, check or transfer during 2026.
2. Say who the worker is — relatives and students under 18 are treated differently.
3. Answer the quarter test — or let the calculator work it out from weekly pay.
4. Choose who pays the employee’s share — then read the Schedule H total, your cost, take-home pay and the deadlines.