The nanny tax refers to employment taxes household employers must pay when hiring domestic workers. In 2026, wages of $2,800 or more trigger FICA obligations.
Nanny Tax Calculator 2026
How to Pay Nanny Taxes in 2026
This nanny payroll tax calculator shows your 2026 obligations as a household employer. The IRS calls household employment tax the "nanny tax" but it applies to any domestic worker earning $2,800 or more in 2026.
Step 1: Get an EIN
Apply for an Employer Identification Number (EIN) from the IRS — free online at IRS.gov, takes 5 minutes. You need an EIN to file tax forms and make deposits. You cannot use your Social Security Number for household employment taxes.
Step 2: Withhold Employee Taxes Each Paycheck
Withhold the employee's share of Social Security (6.2%) and Medicare (1.45%) from each paycheck. If your nanny requests income tax withholding (via W-4), withhold that too. Track all amounts carefully.
Step 3: File Schedule H with Your Tax Return
File Schedule H with your personal Form 1040 by April 15 (or your extension deadline). Pay the employer's share of FICA plus the withheld employee amounts. Provide your nanny a W-2 by January 31. File W-2 with the Social Security Administration.
FAQ
When do I need to pay nanny taxes in 2026?
You must pay employment taxes if you pay a household employee $2,800 or more in 2026 (the 2026 threshold — up from $2,700 in 2025). This threshold applies to each employee separately. If you pay under this amount, you are generally not required to withhold or pay FICA taxes, though income tax withholding may still be requested by the employee.
What taxes does a household employer pay?
As a household employer, you pay: Employer Social Security (6.2% of wages up to $176,100 wage base in 2026), Employer Medicare (1.45% of all wages), and Federal Unemployment Tax (FUTA) of 6% on first $7,000 wages per employee (usually offset to 0.6% with state credit). You also withhold the employee's share of FICA plus any income tax.
What is Schedule H?
Schedule H (Household Employment Taxes) is filed with your personal tax return (Form 1040) to report and pay household employment taxes for the year. You do not file a separate employer tax return — Schedule H consolidates it. You may also need to make quarterly federal tax deposits if your liability exceeds certain thresholds.
Can I just pay my nanny in cash?
You can pay in cash, but you are still legally required to withhold and remit taxes and provide a W-2 by January 31 each year. Paying under the table is illegal and creates liability for back taxes, penalties, and interest. Many families discover this when applying for childcare tax credits or when a nanny files for unemployment benefits.
Is this calculator free?
Yes, completely free with no signup required. For educational purposes only — consult a payroll professional or CPA for your specific situation. Tax thresholds shown are for 2026.