I used NannyPay2 all last year, but when I look at my completed Schedule H, NannyPay only withheld half the Social Security and Medicare taxes from my nanny’s pay that the Schedule H shows I owe! What gives? Is NannyPay wrong, and who is going to make up the difference?
NannyPay is not wrong and, unfortunately, you are responsible for paying the difference. Many workers do not realize that the total of Social Security and Medicare taxes (FICA) they see withheld from their paycheck each week is only half the story! The combined FICA tax rate is actually 15.3%, which is shared equally between the employer and employee. So only one-half of the FICA tax is withheld from the employee’s wages, and then the employer (you, in this case) must “match” or pay the other half of the tax.
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