Withholding Employment Taxes

As a household employer, what employment taxes must I withhold and pay for my nanny?

For 2023, if you expect to pay a household employee more than $2,600 this year, you must withhold and pay federal Social Security and Medicare taxes for that employee, which taxes are sometimes collectively referred to as FICA taxes. FICA taxes are paid equally between the employer and employee, meaning one-half of the FICA tax is withheld from your nanny’s pay, and the other half of the tax you pay as the employer.

You may withhold federal income tax from your nanny’s wages if both you and the nanny agree. Most states follow this income tax withholding rule as well.

If you have paid any one household employee more than $1,000 in any calendar quarter this year or last year, you will also owe federal unemployment taxes (FUTA).

Some states may also have a mandatory unemployment or disability insurance tax that is either paid by the employer, withheld from the employee’s pay, or both.

Last updated on April 19, 2023
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