This nanny tax calculator (Schedule H) estimates the federal employment taxes you owe as a household employer in 2026. Once you pay a nanny, caregiver, or housekeeper about $2,800+ in cash wages, you owe Social Security and Medicare (15.3%), plus federal unemployment (FUTA, ~0.6% on the first $7,000) and usually state unemployment (SUTA). Enter the wages to see what you remit on Schedule H, what to withhold from the employee, and your true employer cost.
The "nanny tax" is the set of federal employment taxes you owe when you pay a household employee — a nanny, in-home senior caregiver, housekeeper, or private cook — above an annual threshold. Once you cross roughly $2,800 in cash wages to one worker in 2026, you become a household employer responsible for Social Security and Medicare (FICA), federal unemployment (FUTA), and usually state unemployment (SUTA). You report it all on Schedule H with your personal Form 1040. This calculator estimates your total nanny-tax bill for 2026.
Two separate thresholds trigger different taxes:
| Tax | 2026 trigger | Rate |
|---|---|---|
| Social Security & Medicare (FICA) | ~$2,800 in cash wages to one employee | 15.3% total (7.65% each side) |
| Federal unemployment (FUTA) | $1,000+ in any single calendar quarter | 6.0% on first $7,000 (often 0.6% net after state credit) |
| State unemployment (SUTA) | Varies by state (often the same $1,000 quarter test) | State rate on a state wage base |
If you stay under the FICA threshold, you owe no Social Security or Medicare — but you can still owe FUTA if you hit $1,000 in a quarter. The calculator applies both tests.
A worker is your household employee if you control what work is done and how it is done — typical of a nanny who works in your home on your schedule with your instructions. By contrast, a worker who controls their own methods, offers services to the public, and brings their own tools (like an independent agency or a self-employed cleaner with many clients) may be an independent contractor, not your employee. Misclassifying a nanny as a 1099 contractor to dodge the nanny tax is a common and risky error — the IRS generally treats nannies as employees.
Suppose you pay your nanny $25,000 in cash wages for the year, withhold no federal income tax, and your state SUTA is 2.7% on the first $7,000.
| Tax | Calculation | Amount |
|---|---|---|
| Social Security + Medicare | $25,000 × 15.3% | $3,825.00 |
| Employer half | $25,000 × 7.65% | $1,912.50 |
| Employee half (withheld) | $25,000 × 7.65% | $1,912.50 |
| FUTA | $7,000 × 0.6% | $42.00 |
| SUTA | $7,000 × 2.7% | $189.00 |
| Total employer cost | employer FICA + FUTA + SUTA | $2,143.50 |
You remit the full $3,825 FICA plus $42 FUTA on Schedule H (the employee half is money you withheld from the nanny's pay), and pay the $189 SUTA to your state separately. Your true out-of-pocket employer cost is about $2,143.50.
FICA is 15.3% total: 12.4% Social Security plus 2.9% Medicare. Legally it splits 7.65% employer / 7.65% employee. You can either withhold the employee's 7.65% from each paycheck or choose to pay both halves yourself (in which case your payment of the employee share is itself additional taxable wages). Most families withhold the employee half. Either way, you remit the entire 15.3% with your Schedule H. The calculator shows both halves so you can see what to withhold versus what you fund.
If you pay any household employee $1,000 or more in a calendar quarter, you owe federal unemployment tax (FUTA). The gross FUTA rate is 6.0% on the first $7,000 of each employee's wages, but timely state unemployment payments earn a credit of up to 5.4%, dropping the effective federal rate to 0.6% — just $42 per employee per year. FUTA is paid entirely by you, the employer; you never withhold it from the nanny. It is reported on Schedule H.
Nearly every state also charges state unemployment tax (SUTA) on household-employer wages, at a state-assigned rate on a state wage base (commonly the first $7,000-$10,000+). New employers get a default rate that adjusts over time. SUTA is paid to your state agency, not on Schedule H, and paying it on time is what unlocks the FUTA credit. Enter your state's rate and wage base in the calculator; rates and bases vary widely by state.
You are not required to withhold federal income tax from a household employee's pay — but you may if both you and the employee agree (the nanny completes a Form W-4). Many families do, to spare the nanny a lump-sum tax bill. If you withhold it, you remit that income tax with your Schedule H too. The calculator includes an optional field for agreed income-tax withholding so you can see the full remittance.
You report household employment taxes on Schedule H, filed with your personal Form 1040. Because Schedule H taxes are added to your own return, you typically cover them by increasing your own withholding or estimated tax payments during the year — otherwise you can face an underpayment penalty on your 1040. You will also need an Employer Identification Number (EIN) and must give your nanny a Form W-2 by January 31, filing copies with the Social Security Administration.
Paying the nanny tax legally unlocks valuable benefits the under-the-table route forfeits: the Child and Dependent Care Credit (a percentage of up to $3,000 in care expenses for one child, $6,000 for two or more) and a Dependent Care FSA (set aside up to the annual limit pre-tax through your employer). For many families these breaks recover a large share of the employer taxes — sometimes more than the FUTA and SUTA combined. The nanny also gains Social Security credits, unemployment eligibility, and verifiable income.
The tool first checks whether your cash wages cross the ~$2,800 FICA threshold. If so, it computes 15.3% Social Security and Medicare (showing the employer and employee halves), FUTA at the net 0.6% on the first $7,000, and SUTA at your state rate and wage base. It then totals what you remit on Schedule H (full FICA + FUTA + any agreed income tax) and your true employer cost (your FICA half + FUTA + SUTA). If wages are below the threshold, it reports no FICA owed and flags the FUTA quarter test. Thresholds are 2026 federal figures; confirm the exact annual amount and your state's SUTA.
This calculator is for families employing a nanny, in-home senior or special-needs caregiver, housekeeper, or other household worker who need to budget their employer taxes and what to withhold, and for anyone deciding whether to pay a caregiver legally on the books. It is also useful before hiring, to fold the roughly 8.5%-12% employer tax load on top of wages into your household budget.
Skipping the nanny tax can feel cheaper, but it exposes you to back taxes, interest, and penalties if discovered (often via an unemployment claim the nanny files), forfeits the dependent-care tax breaks that frequently exceed the employer taxes, and leaves your caregiver with no Social Security record, no unemployment safety net, and no provable income for loans or housing. For a $25,000 nanny, the employer taxes are about $2,143 — and the dependent-care credit or FSA can return a comparable amount, making compliance close to cost-neutral while eliminating the legal risk.
Because Schedule H taxes are added to your personal Form 1040, the IRS expects them to be paid in throughout the year, not in one lump at filing. If you simply wait until April, you can trigger an underpayment penalty on your 1040 even though Schedule H itself is an annual form. Household employers have two clean ways to stay current: increase the withholding at your own W-2 job (file a new Form W-4 adding extra withholding equal to roughly a quarter of your projected nanny tax each quarter), or make quarterly estimated tax payments with Form 1040-ES. The estimated-payment due dates fall in mid-April, mid-June, mid-September, and mid-January. Using the total from this calculator, divide your annual nanny tax by four and pay that amount each quarter to avoid penalties. Families with a single income and a stay-at-home spouse who employs the nanny especially need this, since there may be no second paycheck to absorb the tax through extra withholding.
Once you pay a single household employee about $2,800 or more in cash wages in 2026, you owe Social Security and Medicare (FICA) on those wages. A separate test applies to federal unemployment (FUTA): you owe it if you pay $1,000 or more to household employees in any calendar quarter.
On $25,000 of wages it is about $3,825 in Social Security and Medicare (15.3%, split employer/employee), plus roughly $42 FUTA and a state SUTA amount (for example $189 at 2.7% on $7,000). Your true employer cost — your FICA half plus FUTA and SUTA — is about $2,143.
Yes. Household employment taxes are reported on Schedule H, filed with your personal Form 1040. You typically pay them by increasing your own withholding or estimated tax payments during the year to avoid an underpayment penalty.
Almost always an employee. If you control what work is done and how, the nanny is your household employee and the nanny tax applies. Independent contractors control their own methods and serve the public; misclassifying a nanny as a 1099 contractor is a common and risky mistake.
No, federal income tax withholding is optional for household employees and only happens if you and the nanny agree via a W-4. You must, however, withhold and remit the employee's Social Security and Medicare share (or choose to pay it yourself).
Federal unemployment tax applies if you pay household employees $1,000 or more in any quarter. The rate is 6.0% on the first $7,000 of wages, reduced to an effective 0.6% (about $42 per employee) when you pay your state unemployment tax on time. You pay FUTA entirely yourself.
Yes. Paying legally lets you claim the Child and Dependent Care Credit (a percentage of up to $3,000 of care for one child or $6,000 for two or more) and use a Dependent Care FSA to pay with pre-tax dollars. These breaks often recover much of the employer tax cost.