---
title: How do I withhold taxes from my nanny's paycheck?
description: Hired a nanny and not sure what comes out of their paycheck? Here's what to withhold, who pays what, and why it protects you both.
---

[Household Employment Blog | Nanny Tax Information](https://info.homeworksolutions.com/blog)

# [How do I withhold taxes from my nanny's paycheck?](https://info.homeworksolutions.com/blog/how-do-i-withhold-taxes-from-my-nannys-paycheck)

 Written by [HomeWork Solutions](https://info.homeworksolutions.com/blog/author/homework-solutions) | 10/2/26, 3:03 PM

If you've just hired a nanny, you probably thought of yourself as a parent finding great care for your kids. Then someone mentioned "the nanny tax," and suddenly you realized you're also an employer. We hear from families in that exact moment every week, and here's the good news: the core of it is simpler than it sounds.

Each payday, you hold back 7.65% of your nanny's gross pay for her share of Social Security and Medicare. You add your own matching 7.65%, and that total goes to the IRS. You will likely want to withhold income taxes as well, based on the W-4 form your nanny gives you. That's really the heart of it.

This kicks in once you pay a household employee $3,000 or more in wages in 2026. That number tends to change every year, so check the IRS site or the HWS blog at the change of year.

## Is the "nanny tax" only for nannies?

Not at all, and this surprises a lot of people. The name stuck because nannies are the most common household employees, but the same rules apply to anyone you employ in your home. That includes housekeepers, senior caregivers, house managers, and personal assistants.

So if you have a private housekeeper who comes every week in addition to your nanny, everything in this post applies to their paycheck, too.

## Who actually pays what?

This is the part that trips up almost every family we talk to, so let's make it plain.

Social Security and Medicare are on you. As the employer, you're the only one who can send these taxes to the IRS. You withhold your nanny's half from her paycheck and pay your half on top. Even if your nanny wanted to pay her share herself, she can't. It has to come through you.

Income taxes belong to your nanny. You can take them out of each paycheck, which is what most nannies prefer, or they can pay the IRS and state (and sometimes local government) directly during the year. Either way is fine, as long as it gets paid.

Depending on where you live, your nanny may also contribute a small amount toward state programs like disability insurance, paid family leave, or another state or local employee funded tax. Only a handful of states require this, and your state's tax or labor agency website will have details. Alternatively, you can check out HomeWork Solutions household employer tip sheet for [your state](https://www.homeworksolutions.com/knowledge-center/household-employment-laws-by-state/).

## Can I just cover my nanny's share for her?

You can, and some families do fund the full 15.3%.

There's one small wrinkle that's specific to household employers. When you pay your nanny’s share instead of withholding it, the IRS treats that amount as extra income for income tax purposes (IRS Publication 926). It isn't a problem. It just needs to be reported correctly on the nanny’s W-2 at the end of the year, which is exactly the kind of detail we take care of for families.

## Do I have to withhold income tax, too?

No. For household employees, federal income tax withholding is optional. For state and local income taxes, the rules vary, so it's worth a quick check for yours.

Our advice? Having income tax come out a little at a time is so much easier for your nanny than facing one big bill in April. Thoughtful foresight like this is one of many things that makes a nanny want to stay with a family for years.

## What does withholding look like on an actual payday?

Let's say your nanny earns $1,000 a week before taxes. Her share of Social Security and Medicare comes to $76.50, so their paycheck would be $923.50, before any income tax you've agreed to hold back. You'd fund your matching employer half of $76.50, and employer Federal and state unemployment taxes.

A few things make this run smoothly. Agree on a gross(before taxes are withheld) hourly rate up front, so there's never confusion about what your nanny earns versus what they take home. Give your nanny a pay stub each time that shows the breakdown. Also get an Employer Identification Number from the IRS, and register with your state as an employer before your first payroll. At HomeWork Solutions, we obtain these numbers for our clients.

As for where the money goes, you report federal household employment taxes on [Schedule H](https://www.irs.gov/forms-pubs/about-schedule-h-form-1040), which you file with your individual income tax return. Families should pay along the way through quarterly estimated payments; many taxpayers are required to do so, and it also prevents a large tax bill from household employment taxes in April. Most states require quarterly filings, rather than annual filings. Each January, your nanny needs a W-2 for her own tax filing.

## What if I skip the withholding?

This is where we want to be honest with you, without trying to scare you.

If you don't withhold your nanny's share, the IRS still expects the full amount from you. And when a tax return was never filed, there's no time limit on the IRS coming back for it. It doesn't fade away after a few years.

Where families most often run into trouble is at the end of a nanny relationship. If your nanny applies for unemployment after being paid off the books, they can still receive benefits, but their claim will raise a red flag that the employment was never reported and taxes were never paid. At that point, the family becomes responsible for all of it: both halves of Social Security and Medicare, back unemployment insurance taxes, and penalties and interest on top. Your nanny may owe back income taxes and penalties of their own.

Paying legally protects you both. Your nanny builds Social Security credits, has proof of income for things like renting an apartment or getting a loan, and is able to easily collect unemployment benefits if they ever need them. You get to sleep easy knowing the IRS or state won’t mail you a notice with a huge bill.

If you've been paying under the table and want to make it right, please don't panic. You're far from the only family in this spot, and it's very fixable. A household payroll specialist like HomeWork Solutions can walk you through getting caught up.

## Frequently asked questions

**How much tax do I take out of my nanny's paycheck?**

Take out 7.65% of their gross pay for Social Security and Medicare. Add any required state employee taxes and any agreed upon income tax withholdings.

**Can my nanny pay her own Social Security and Medicare taxes?**

No. As their employer, you're the only one who can pay these to the IRS. Your nanny is responsible for their own income taxes. These can be withheld from their pay by you, or can instead be paid directly to the IRS by the employee.

**Do I have to withhold taxes if I my nanny works part-time?**

Social Security and Medicare apply once you pay a household employee $3,000 (2026) or more in wages. Some state taxes start at lower amounts, so check your state's rules.

**Is it okay to fund my nanny's share of the taxes myself?**

Yes. Just know it counts as extra wages for income tax purposes, so it needs to show up correctly on their W-2.

## You don't have to figure this out alone

Between school pickups, work, and everything else on your plate, doing payroll math every payday is probably not how you want to spend your evenings. HomeWork Solutions has been helping families take care of their household employees since 1993, and when you call, you'll talk with a real person who knows this inside and out. If you'd rather hand this off and not think about it again, [schedule a free consultation](https://www.homeworksolutions.com/contact-us/). We'll take it from here.

[View full post](https://info.homeworksolutions.com/blog/how-do-i-withhold-taxes-from-my-nannys-paycheck)

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