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How to Use Nanny Tax Calculator?

Have you ever wondered how to use a nanny tax calculator? You may have seen this type of calculator on the internet when trying to look for information on how to pay nanny tax to the Internal Revenue Service (IRS). This calculator is a quick and easy solution for determining the necessary nanny tax payments you need to process. To give you an idea, we provide you with the basic information you need to about the nanny tax and the nanny tax calculator.

How To Pay Nanny Tax Using Calculator: Things To Know


Coverage of Nanny Tax

woman and babies playing | How to Use Nanny Tax Calculator? | nanny tax calculator

The so-called “nanny tax” covers the tax withheld from the salary of an employed nanny, and the tax paid by the nanny’s employer. It also includes payment of Social Security and Medicare taxes, also known as Federal Insurance Contributions Act (FICA) tax. If there are applicable federal and state income taxes, employers may also withhold these from their employees, though IRS does not require this.

Do You Qualify For IRS Back Tax Relief? Take The Quiz Now!

Compliance With Nanny Tax

How to pay nanny tax? Here are steps employers need to do to comply with nanny tax payment:

  1. Establish tax accounts and obtain an Employer Identification Number (EIN)
  2. Withhold Social Security, Medicare and any other required state taxes from each paycheck
  3. File required state unemployment insurance and state income tax returns, and remit payments to the state
  4. Provide a Form W-2 to the employee and file a W-2 Copy A and W-3 with the Social Security Administration every January of each year
  5. Complete Schedule H with the employer’s Form 1040 (Personal Income Tax Return)

Computation of Nanny Tax

man smiling using laptop | How to Use Nanny Tax Calculator? | nanny tax calculator

Employers need to withhold around 13-20% of their nanny’s gross wages to pay for the nanny tax. As for Social Security and Medicare tax payment, 7.65% will be shouldered by the employer and another 7.65% will be taken from wages — 6.2% for social security, and 1.45% for Medicare. Necessary state taxes (such as income and unemployment taxes) will also apply, with amounts ranging per state. Employer taxes are typically about 10% above the nanny’s gross payroll.

Calculating Nanny Tax

All this information may be too much for employers to think about. Luckily, there are calculators readily available online to assist in computing nanny tax. You may check out one such as this one which applies to nannies wherever in the US. There also are calculators designed per state, such as this one for California, so employers who will use these calculators no longer need to research for state-specific tax figures.

Do You Qualify For IRS Back Tax Relief? Take The Quiz Now!

These calculators offer convenience in determining nanny tax computation. All an employer need to do is indicate the frequency of salary payment to nanny, the amount of payment, plus the state where the employee lives. There’s no need to do manual calculations, hence lessening the instances of wrongly-declaring nanny tax payments.


Need to pay nanny tax? Watch this video by the Wall Street Journal to know how to pay nanny tax:

It’s good to know how to manually compute for your nanny tax. But at certain times when you need to rush things, it’s best to rely on available online calculators to determine how to pay nanny tax the proper and faster way.

Have you tried using a nanny tax calculator in computing how much payable you need to pay IRS? Share your experience with us in the comments section below.

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