Nanny Payroll Calculator — Nanny Net Pay + Employer Cost
Calculate your nanny's net paycheck and your total cost as a household employer — including nanny tax (FICA), federal unemployment (FUTA), and state income tax. Uses 2026 IRS Schedule H data. Free for all 50 states.
Quick Answer
At $20/hour for 40 hours/week, a nanny's gross weekly pay is $800. After employee FICA ($61.60) and income tax withholding, the nanny nets approximately $668/week in Texas. The household employer pays an additional $61.60/week in matching FICA plus $0.81 FUTA — total employer weekly cost: $861.60. Annual cost: approximately $44,803. Based on 2026 IRS nanny tax threshold of $2,700.
Nanny's Weekly Paycheck
Employer's Weekly Cost
What Is the Nanny Tax? (2026 Rules)
The "nanny tax" is the informal name for household employment taxes under IRS Schedule H. In 2026, if you pay a nanny or other household employee $2,700 or more during the year, you become a household employer with payroll tax obligations:
Social Security Tax
Medicare Tax
FUTA (Federal Unemployment)
Federal Income Tax
You file and pay nanny taxes via Schedule H attached to your Form 1040. Many household employers use payroll services to handle withholding, W-2 filing, and quarterly tax remittance automatically.
Total Nanny Cost Including Taxes
Annual employer cost — 52 weeks, no paid time off
| Hourly Rate | Hours/Wk | Annual Gross | Employer FICA | Total Employer Cost |
|---|---|---|---|---|
| $15/hr | 20h | $15,600 | $1,194 | $16,836 |
| $18/hr | 40h | $37,440 | $2,864 | $40,346 |
| $20/hr | 40h | $41,600 | $3,182 | $44,824 |
| $22/hr | 40h | $45,760 | $3,500 | $49,302 |
| $25/hr | 40h | $52,000 | $3,978 | $56,020 |
| $30/hr | 45h | $70,200 | $5,370 | $75,612 |
Total employer cost = gross salary + employer SS (6.2%) + employer Medicare (1.45%) + FUTA ($42 max). Does not include state unemployment (SUTA) which varies.
Offset nanny tax costs with these tax benefits:
- Dependent Care FSA — up to $5,000/year pre-tax for childcare expenses
- Child & Dependent Care Credit — 20–35% of up to $3,000 ($6,000 for 2+ children)
- Combined, these can reduce your net nanny cost by $1,500–$3,500/year
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Nanny Payroll Calculator by State
State income tax withholding varies. Select your state for exact nanny paycheck calculations.
Frequently Asked Questions
What is the nanny tax?
The 'nanny tax' refers to the payroll taxes household employers must pay when paying a nanny, babysitter, or other household employee. In 2026, if you pay a household employee $2,700 or more in a calendar year, you must withhold and pay Social Security (6.2% employee + 6.2% employer) and Medicare (1.45% employee + 1.45% employer). You also owe FUTA (federal unemployment tax) at 0.6% on the first $7,000 in wages.
How much does a nanny cost per year including taxes?
On a $20/hour nanny working 40 hours/week (annual gross: $41,600), the employer's total annual cost is approximately $44,789 — including employer Social Security ($2,579), Medicare ($603), and FUTA ($42). The nanny's net take-home after employee FICA and income tax withholding is approximately $33,800–$36,000 depending on state.
Do I have to pay nanny tax if I pay cash?
Yes. Paying a nanny in cash does not exempt you from payroll tax obligations. If you pay $2,700 or more to a household employee in 2026, you are legally required to pay nanny tax regardless of the payment method. Failure to comply can result in back taxes, penalties, and interest. The IRS collects nanny taxes via Schedule H, filed with your personal Form 1040.
How do I file nanny taxes?
Household employers report and pay nanny taxes using IRS Schedule H, attached to Form 1040 (your personal tax return). You must also provide your nanny with a W-2 by January 31 each year. If you expect to owe more than $1,000 in household employment taxes, you may need to make quarterly estimated tax payments. Some employers also use payroll services to handle this automatically.
What is the 2026 nanny tax threshold?
In 2026, you owe nanny tax if you pay a household employee $2,700 or more during the calendar year. This threshold is indexed to inflation and set by the IRS annually. Below $2,700 total annual wages, no Social Security or Medicare withholding is required. FUTA still applies if wages exceed $1,000 in any calendar quarter.
Can I deduct nanny costs on my taxes?
As a household employer, you can claim the Child and Dependent Care Credit for up to $3,000 in qualifying care expenses per child ($6,000 for two or more). This credit is worth 20–35% of eligible expenses. You may also use a Dependent Care FSA (up to $5,000/year pre-tax) to pay nanny costs. These two tax benefits can significantly offset the nanny tax burden.
Does a nanny pay income tax?
Yes, a nanny's wages are taxable income. However, whether income tax is withheld depends on the nanny's Form W-4 and the employer's decision to withhold. Many household employers withhold federal and state income tax as a convenience to the nanny. If no income tax is withheld, the nanny must pay estimated taxes quarterly. Social Security and Medicare (employee share) must always be withheld if wages exceed the $2,700 threshold.
What is the difference between a nanny and an independent contractor for taxes?
Under IRS rules, nannies are almost always employees (not independent contractors) because the household employer controls when, where, and how the nanny works. Misclassifying a nanny as a 1099 independent contractor is illegal and can result in significant penalties. As an employee, the nanny receives a W-2, and the employer pays employer FICA. A 1099 contractor would owe self-employment tax (15.3%) on their own — which is not appropriate for typical childcare arrangements.