Nanny Tax Calculator 2026
Estimate the Social Security, Medicare, and FUTA tax you owe on a household employee's 2026 wages, plus their take-home pay and your total cost.
Nanny Tax Calculator 2026
Tax Year
Cash Wages You Pay
Cash wages only. The value of food, lodging, clothing, or transit passes you provide is not counted.
Total cash wages paid to this one employee for the year.
Who Pays the Nanny's FICA Share?
Paying your nanny's share is common, but it becomes extra taxable income on their W-2 Box 1. It is not extra Social Security, Medicare, or FUTA wages.
The $1,000 quarterly test is estimated from your entry. Hourly entries assume the weeks you enter run consecutively, so the busiest quarter holds up to 13 of them. Annual entries assume pay is spread evenly across four quarters, and lumpy pay can trip the test even when a quarter of the annual figure is under $1,000. Two things this tool cannot see: the $1,000 test adds up wages to all your household employees, and a qualifying quarter in the prior calendar year also brings 2026 wages into FUTA.
2026 tax year estimate. Federal household employment tax only: no state unemployment insurance, no state income tax, and no federal income tax withholding. FUTA tops out at $42 per employee because the wage base is the first $7,000. Estimates only, not tax or legal advice.
Tax47
Tax Calculator USA
See the Rest of Your Return
Household employment tax goes on Schedule H. Tax47 builds the rest of your 2026 return from your W-2s and 1099s and shows the refund or balance due.
Free · No sign-up needed
The two 2026 thresholds that decide whether you owe nanny tax
Most explainers describe one number. There are two. They are independent, and clearing one has no effect on the other.
The first is the coverage threshold for Social Security and Medicare: $3,000 in cash wages to any one household employee during 2026. It is a cliff, not a marginal threshold. Pay $2,999 and no FICA is owed at all. Pay $3,000 and the 6.2% Social Security tax and 1.45% Medicare tax apply to every dollar from the first, on both your side and the employee's, which is $459.00 of combined tax the moment you cross. That is why a small raise near the line can cost far more than the raise itself.
The second is the federal unemployment test: $1,000 in cash wages to household employees in any calendar quarter of 2026 or of the prior calendar year. It is measured by quarter, not by year, and it aggregates across every household employee you pay. A summer nanny at $15 an hour for 10 hours a week over 10 weeks earns $1,500 for the year. That is under the $3,000 FICA threshold, so no Social Security or Medicare is owed, but the $1,500 all lands in one quarter, so FUTA applies and you owe $9.00. Failing the FICA test does not get you out of FUTA.
What you actually owe: Social Security, Medicare, and FUTA line by line
Once the $3,000 threshold is crossed, your employer share is 6.2% for Social Security on wages up to the 2026 Social Security wage base of $184,500, plus 1.45% for Medicare on every dollar with no cap. That is 7.65% in total, and the employee owes an identical 7.65%, normally withheld from their pay. On $40,000 of wages the employer side is $2,480 of Social Security and $580 of Medicare, or $3,060, matched by the same $3,060 from the employee.
FUTA is smaller than people expect. The gross rate is 6.0%, but employers who pay state unemployment tax in full and on time claim a credit of up to 5.4%, leaving a net rate of 0.6%. That rate applies only to the first $7,000 of wages per employee, so federal unemployment tax tops out at $42 no matter how much you pay. Raising wages does not raise it. One caveat: a state that has borrowed from the federal unemployment account can be designated a credit reduction state, which lifts the effective rate, and the 2026 list is not published until late in the year.
That leaves the question of who absorbs the employee's 7.65%. Covering it yourself is common, especially with live-in and long-term nannies. When you do, the amount you cover is added to the employee's wages for income tax purposes and shows up in Box 1 of their W-2, but it is not Social Security, Medicare, or FUTA wages, so Boxes 3 and 5 stay at the gross figure and nothing compounds. What this calculator does not include: state unemployment insurance (commonly 1% to 5% of wages, and often larger than the federal unemployment bill), state income tax, and federal income tax withholding, which is optional for household employees anyway.
Reporting it: Schedule H, Form W-2, and paying during the year
Household employment taxes go on Schedule H, which attaches to your own Form 1040 and is filed with it by the April deadline. You will need an employer identification number, and you file Form W-2 for the employee plus Form W-3 with the Social Security Administration, with the employee's copy due by January 31.
The timing trips people up. Schedule H tax is not withheld from anyone's paycheck during the year, so a household employer who does nothing owes a full year of it at once in April, often with an underpayment penalty on top. Raising the withholding on your own job, or making quarterly estimated payments, spreads it out. The paycheck take-home pay calculator helps size that adjustment.
The childcare wages you pay can also cut your tax elsewhere on the return. Wages paid so you can work can support the Child and Dependent Care Credit on Form 2441, or you may be better off running them through a dependent care FSA. Those are separate calculations: see the dependent care credit calculator and the dependent care FSA vs. credit calculator for the comparison.
These figures are estimates for the 2026 tax year, drawn from IRS Publication 926 and the Schedule H instructions. They cover federal household employment tax only and are not tax or legal advice. Confirm your own numbers with a tax professional before filing.
Frequently Asked Questions
Common questions about nanny tax calculator 2026
What is the nanny tax threshold for 2026?
It is $3,000 in cash wages paid to any one household employee during 2026. Cross that line and Social Security and Medicare tax apply to all of that employee's wages for the year, not just the amount above $3,000. The figure is indexed by the Social Security Administration and rises most years. Federal unemployment tax runs on a separate test: $1,000 in cash wages in any calendar quarter of 2026 or of the prior calendar year. Source: IRS Publication 926 for 2026.
Do I have to withhold federal income tax from my nanny's pay?
No. Publication 926 is explicit that you are not required to withhold federal income tax from wages you pay a household employee. You withhold it only if the employee asks you to and you agree, and they must give you a completed Form W-4. Most household employers skip it and the nanny covers income tax through quarterly estimated payments. This calculator does not model income tax withholding, so the take-home figure it shows is before any federal or state income tax. The paycheck take-home pay calculator covers that side.
Can I pay my nanny's share of Social Security and Medicare for them?
Yes, and it is common. The amount you cover is added to the employee's wages for income tax purposes, so it lands in Box 1 of their W-2, but it is not counted as Social Security, Medicare, or FUTA wages. That means it does not compound: Boxes 3 and 5 stay at the gross wage figure and there is no second round of tax on the amount you absorbed. Switch the chip above to "I pay it for them" to see the effect.
Which household workers are exempt from the nanny tax?
Cash wages are not counted as Social Security and Medicare wages when you pay them to your spouse, your child under age 21, your parent, or an employee under age 18 whose principal occupation is not household work. A student's principal occupation is never household work. The parent exemption has a carve-out. It stops applying when both of two conditions are true: your parent cares for your child who is under 18 or needs adult personal care for four continuous weeks in a quarter, and you are divorced and not remarried, widowed, or living with a spouse whose condition prevents them from caring for the child for four continuous weeks in that quarter. The FUTA exemption list is shorter: spouse, child under 21, and parent only, with no under-18 exemption.
Is a part-time babysitter a household employee?
Possibly. Two separate questions get tangled together here. Whether the sitter is your employee turns on control: if you decide what work gets done and how it gets done, they are a household employee. Hours are irrelevant and there is no part-time exemption. A sitter who sets their own terms and works for many families on their own schedule may be genuinely self-employed. The second question is the dollar threshold, which only comes up once the person is your employee. A sitter you control who earns $500 in a year is still your household employee, you simply owe nothing.
How much does a nanny actually cost me in employer taxes?
About 7.65% of cash wages for Social Security and Medicare, plus at most $42 of federal unemployment tax (0.6% of the first $7,000). On $40,000 of wages that is $3,060 plus $42, or $3,102, roughly 7.8% on top of pay. State unemployment insurance sits on top of that and commonly runs 1% to 5% of wages, which this calculator does not include. The FICA payroll tax calculator shows the same 6.2% and 1.45% mechanics from the worker's side.
How and when do I file and pay household employment tax?
You report it on Schedule H and file that with your Form 1040 by the April deadline. You also issue Form W-2 to the employee and send Form W-3 to the Social Security Administration, with W-2 copies due to the employee by January 31 (the next business day when that date falls on a weekend). You will need an employer identification number. Because Schedule H tax is not withheld from your own paycheck, raise your own withholding or make estimated payments during the year so the bill does not arrive with an underpayment penalty attached.