Household employer · IRS Pub 926 · Schedule H
Nanny Tax Calculator (2025 & 2026)
Pay a nanny, in-home senior caregiver, or housekeeper cash wages of at least the annual threshold — $2,800 in 2025 or $3,000 in 2026 — and Social Security & Medicare apply to every dollar, not just the excess.
The 2026 threshold is newly indexed to $3,000 (up from $2,800 in 2025). The cliff is what surprises people: paying $2,999 in 2026 means zero FICA; paying $3,000 means FICA on the entire $3,000. Under it, nothing. At it, everything.
The Labor Department names 2026 credit-reduction states in November 2026; none is applied here yet. California was 1.2% for 2025. Contributions paid after April 15, 2027 earn only 90% of the credit.
Coverage verdict
FICA applies
Threshold for 2026: $3,000. You are at or above the threshold — Social Security (up to the wage base) & Medicare apply from dollar one.
Total employer cost
$32,337
Cash wages + employer FICA + FUTA. Add state unemployment where applicable.
Breakdown
Employer FICA (6.2% up to the wage base + 1.45%)
$2,295
Social Security stops at the 2026 wage base of $184,500; Medicare applies to all wages.
Employee FICA withheld
$2,295
The same 6.2% + 1.45%, plus 0.9% Additional Medicare Tax on any wages over $200,000. You may agree to cover this on the employee’s behalf — a policy choice, not a rule.
FUTA on first $7,000
$42
6.0% nominal, 0.6% net with the full state credit ($42/yr in most states); your rate here is 0.6%. Due only if you paid $1,000+ in cash wages to all household employees combined in any calendar quarter of 2025 or 2026.
Schedule H remit with your 1040
$4,632
Raise your own withholding or pay quarterlies to cover it.
Paying legally is often cheaper than it looks
Over-the-table nanny wages are qualifying expenses for both the Dependent Care FSA and the §21 credit, though never the same dollars: every FSA dollar reduces the credit’s expense cap. After those benefits, the net cost of doing this correctly shrinks — often below what an audit or a missed W-2 would cost. See the Dependent Care Calculator for how the FSA and the credit interact.
Honesty notes. Federal income tax withholding for the employee is optional. FICA is exempt for wages paid to your spouse, your child under 21, your parent (generally), and anyone under 18 at any time during the year whose principal occupation is not household work (a student’s is not). FUTA is exempt for wages paid to your spouse, your child under 21, and your parent (no exception). The worker question above applies both lists. State unemployment (SUTA) usually applies too — check your state.
Sources & References
Primary references used for this content
Household Employer's Tax Guide
Coverage threshold, FICA/FUTA rules, and Schedule H filing.
View on irs.gov
Household Employment Taxes
The form household employers file with their own 1040.
View on irs.gov
Employment Taxes for Household Employees
Plain-English summary of household-employer obligations.
View on irs.gov
✓3 primary sources; links re-checked on a weekly rotation by the source watcher
Disclaimer: This calculator provides estimates for educational purposes only. Not tax, legal, or financial advice. Results may vary based on your specific circumstances. Consult a qualified CPA or tax professional for personalized guidance.