Nannies, Understand Your Pay Check

Many employees are not aware of what is being deducted from their paycheck. Household employees in particular (nannies, housekeepers, elder caregivers etc.) often are paid by personal check, do not have a pay stub, and work with families who themselves are not familiar with payroll and employment taxes.

A household employer may deduct legally authorized Social Security and Medicare taxes from the household worker's gross payroll. (Gross payroll is the hourly rate multiplied by the appropriate hours worked before deductions.)You may ask and your employer may agree to withhold your income taxes from your payroll. The amount of these deductions would be determined by your instructions on Form W-4 (many states have a separate by largely similar form for state withholding), your income and your pay frequency. The free Nanny Payroll Tax Calculator at the HomeWork Solutions' website can assist these calculations.

Any other deductions from your payroll must be both legally permissible and agreed to in writing between the nanny and household employer. Typically these will be deductions for employee contribution to health insurance, life insurance, retirement plans (SIMPLE IRA) and agreed uniform fees. They may also be for court ordered wage garnishments.

It is illegal to deduct employer employment taxes (the family's contribution to Social Security and Medicare, and employer unemployment taxes) from the household worker's pay. The family may not deduct money for loss, breakage or damage to family property - including automobile accidents or broken housewares.