Schedule H · $3,000 Threshold for 2026 · 7.65% Each Side · FUTA 0.6% on $7,000
Nanny Tax Calculator
Paying a nanny, babysitter, housekeeper or home caregiver who works in your home? Enter what you pay in cash wages to see the household employment taxes you report on Schedule H: Social Security and Medicare for you and the employee, federal unemployment (FUTA) tax, the family-member exemptions, and what lands in the employee's paycheck.
Household Employee Inputs
Sets the cash wage threshold ($2,800 for 2025, $3,000 for 2026) and the Social Security wage base ($176,100 / $184,500).
Gross pay by cash, check or transfer, before any withholding. Leave out the value of food, lodging and other noncash items; they are not Social Security, Medicare or FUTA wages.
Under 18: "main job" means household work is their principal occupation; a student's never is. Parent exception: your parent cares for your child under 18 (or a child needing adult care), and you are divorced and not remarried, widowed, or married to a spouse who cannot care for the child.
FUTA test: total cash wages to ALL your household employees of $1,000 or more in any calendar quarter of this year or the year before. Paying one employee $4,000 or more in the year always meets it.
If you pay it, it is added to the employee's income-tax wages (Form W-2 box 1), not to their Social Security or Medicare wages.
Only if the employee asked and you agreed. Household employers are not required to withhold income tax.
"Paid in full" assumes the full 5.4% credit (all required state contributions paid by the due date), cutting FUTA from 6.0% to 0.6%. Late or partial payments use Schedule H Section B.
0 for most states. For 2025: California 1.2, U.S. Virgin Islands 4.5. The Department of Labor sets the 2026 list in November 2026.
Used only to show the amount to withhold and the take-home pay per payday.
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Enter the cash wages you pay to see your Schedule H household employment tax
Household Employment Taxes
Social Security 12.4% up to the wage base and Medicare 2.9% on all cash wages once one employee's cash wages reach the year's threshold; Additional Medicare Tax 0.9% withheld above $200,000; FUTA 6.0% of the first $7,000 less the 5.4% state credit and any credit reduction (Schedule H Parts I and II; IRS Publication 926). One employee only. State unemployment tax, state disability and paid-leave programs and workers' compensation are not included. Educational estimate only.
Want the full rules - who counts as a household employee, how the $3,000 test and the family exemptions work, the forms and deadlines, and how to pay the tax during the year so you avoid a penalty? Read the companion guide.
If you pay one household employee $3,000 or more in cash wages in 2026 ($2,800 in 2025), Social Security and Medicare tax apply to all of that employee's cash wages: 7.65% from you and 7.65% withheld from the employee (Social Security stops at the $184,500 wage base). If you pay $1,000 or more to household employees in any calendar quarter of this year or last year, you also owe FUTA tax, usually 0.6% of the first $7,000 ($42). On $36,000 of 2026 wages, Schedule H shows $5,550: $5,508 of Social Security and Medicare tax plus $42 of FUTA, of which your own cost is $2,796 and $2,754 comes out of the nanny's pay.
Key Takeaways
Threshold: $3,000 of cash wages to one employee in 2026 ($2,800 in 2025). Reach it and the tax applies from the first dollar.
Rates: Social Security 6.2% and Medicare 1.45% each for you and the employee; Social Security stops at the $184,500 wage base for 2026.
FUTA: your cost only, triggered by $1,000 in any calendar quarter; 0.6% of the first $7,000 when your state unemployment tax is paid on time.
Family exemptions: no Social Security, Medicare or FUTA on wages to your spouse or your child under 21; a parent is exempt unless the parent exception applies.
Under 18: exempt from Social Security and Medicare unless household work is their principal occupation, but FUTA can still apply.
Income tax withholding is optional and only by agreement; Social Security and Medicare withholding is not.
Where it goes: Schedule H, attached to your Form 1040, plus a Form W-2 for the employee.
The tool follows the order of Schedule H (Form 1040): Part I for Social Security, Medicare and any income tax withheld, Part II for FUTA, and Part III for the total that carries to Schedule 2 of your Form 1040. For the rules behind each input, see the Nanny Tax Guide.
Step 1: The Cash Wage Test Pub. 926
Social Security and Medicare apply only if the cash wages you pay that one employee during the year reach the threshold: $2,800 for 2025 and $3,000 for 2026. The test is all or nothing. Below it, none of the wages are Social Security or Medicare wages. At or above it, all of them are, "regardless of when the wages were earned." Wages to a spouse, a child under 21, a parent (unless the parent exception applies) and an employee under 18 whose principal occupation is not household work are left out, even above the threshold.
Step 2: Social Security and Medicare (Schedule H Lines 1 to 6) Sch. H
Line 2 is 12.4% of cash wages up to the Social Security wage base ($176,100 for 2025, $184,500 for 2026). Line 4 is 2.9% of all cash wages; Medicare has no wage base. Half of each is the employee's share and half is yours. Line 6 is the 0.9% Additional Medicare Tax you must withhold on wages above $200,000; it is the employee's tax only, with no employer match. Amounts are rounded to the cent on each line; the employee's share is rounded first and your share is the rest of the line.
Step 3: FUTA (Schedule H Lines 15 to 24) Sch. H
If you paid $1,000 or more in total cash wages to household employees in any calendar quarter of this year or last year, the first $7,000 of each employee's cash wages are FUTA wages. FUTA is 6.0% of those wages, less a credit of up to 5.4% for state unemployment contributions paid by the due date of your return, a net 0.6%. A credit reduction state's rate (California 1.2% for 2025) is subtracted from the credit, as in Worksheet 2 of the Schedule H instructions. Wages to your spouse, your child under 21 and your parent are never FUTA wages; wages to an employee under 18 are.
Step 4: Who Pays What Pub. 926
Your cost is your 7.65% plus FUTA. The employee's 7.65% is withheld from pay unless you choose to pay it yourself. If you pay it, Publication 926 says it "must be included in the employee's wages for income tax purposes" but is not counted as Social Security, Medicare or FUTA wages, so the tool adds it to Form W-2 box 1 only. Federal income tax you withhold is the employee's money passed through to the IRS on line 7.
Household Employment Tax Figures for 2025 and 2026
Schedule H figures (IRS Publication 926 and Schedule H instructions)
Item
2025
2026
Cash wage threshold for Social Security and Medicare (one employee)
FUTA quarterly wage test (all household employees)
$1,000 in any quarter of 2024 or 2025
$1,000 in any quarter of 2025 or 2026
FUTA wage base / net rate with full state credit
$7,000 / 0.6% ($42)
$7,000 / 0.6% ($42)
Form W-2 and W-3 due
February 2, 2026
February 1, 2027
The 2025 credit reduction states listed in Worksheet 2 of the Schedule H instructions are California (1.2%) and the U.S. Virgin Islands (4.5%). The Department of Labor determines the 2026 credit reduction states in November 2026; enter the rate yourself if your state is on that list.
Worked Examples
Example 1 - IRS Publication 926: $70 a week for 48 weeks in 2026
Cash wages ($70 x 48)$3,360.00
Employee's Social Security (6.2%) / Medicare (1.45%)$208.32 / $48.72
Employer's Social Security / Medicare$208.32 / $48.72
FUTA: no other household employees and no 2025 household payroll, so no quarter of 2025 or 2026 reaches $1,000 ($70 x 14 Fridays at most = $980)$0.00
Schedule H total$514.08
Example 2 - Full-time nanny, $36,000 in 2026, tax withheld
Social Security tax, line 2 ($36,000 x 12.4%)$4,464.00
Medicare tax, line 4 ($36,000 x 2.9%)$1,044.00
FUTA ($7,000 x 6.0% = $420, less $378 credit)$42.00
Schedule H total$5,550.00
Your cost on top of wages ($2,232 + $522 + $42)$2,796.00
Withheld from each weekly paycheck ($2,754 / 52)$52.96
Example 3 - The threshold is all or nothing (2026, FUTA test met)
$2,999 of cash wages: FUTA only ($2,999 x 0.6%)$17.99
$3,000 of cash wages: $372.00 + $87.00 + $18.00 FUTA$477.00
Example 4 - California household employer, $36,000 in 2025
Social Security and Medicare ($4,464.00 + $1,044.00)$5,508.00
Example 5 - IRS Publication 926: you pay the employee's share on $100 a week
Tax you pay each payday (7.65% + 7.65%)$15.30
Over 52 weeks ($5,200 of wages): Schedule H lines 2 + 4$795.60
Employee's Form W-2 box 1 ($107.65 x 52)$5,597.80
Employee's Social Security and Medicare wages (boxes 3 and 5)$5,200.00
Practitioner Insight (LMN Tax Inc.)
LMN Tax Inc. - Planning Notes
Most household employers we see do not find out about the nanny tax until they prepare their return, and by then two things have gone wrong: nothing was withheld from the nanny's pay, and nothing was set aside for the employer's share. The first fix is simple. Decide at hire whether you will withhold the employee's 7.65% or pay it yourself, and put it in writing, because quietly absorbing it later turns into extra box 1 wages the nanny may not expect.
The second is cash flow. Schedule H tax is added to your own income tax, so it counts toward your estimated tax. We raise the client's own Form W-4 withholding or quarterly estimates by the expected Schedule H total in the first month, rather than letting a $5,000 balance and an underpayment penalty appear in April.
The third is the agency question. A nanny placed by an agency is still your employee if you pay them directly and control the work; only an agency that controls how the work is done takes the employer role. A babysitter who serves the public from their own home is usually self-employed.
Finally, the credit. The taxes you pay on a caregiver's wages are work-related expenses under IRS Publication 503, so we add the employer's share and FUTA to the care costs counted toward the child and dependent care credit or a dependent care FSA reimbursement.
When This Calculator Does Not Cover Your Situation
More than one household employee. The $3,000 test and the $7,000 FUTA base apply per employee, but the $1,000 quarterly FUTA test counts all household employees together. Run the tool once per employee and add the results.
State taxes. State unemployment tax, state disability and paid family leave programs, state income tax withholding and workers' compensation are not included. Check with your state's unemployment tax agency.
Late or partial state contributions. If you paid only part of your state unemployment contributions on time, your FUTA credit is figured on Schedule H Section B and Worksheet 1 and falls between the two choices offered here.
Several states. The credit reduction applies to wages subject to each credit reduction state's unemployment law. Enter a blended rate only if one employee worked in more than one state.
Noncash pay and benefits. Meals, lodging and other noncash items are not Social Security, Medicare or FUTA wages but can be taxable income. Qualified parking and transit benefits up to $340 a month for 2026 can be excluded.
Business owners. If you run a business or farm, you can report household employees on your business employment tax returns instead of Schedule H.
Very high wages. If you pay the employee's share and wages exceed $200,000, the tool still shows the 0.9% Additional Medicare Tax as withheld from the employee.
Frequently Asked Questions
How much is the nanny tax in 2026?
If you pay one household employee $3,000 or more in cash wages in 2026, Social Security and Medicare taxes apply to all of those wages: 7.65 percent from you and 7.65 percent withheld from the employee, 15.3 percent in total (Social Security only up to the $184,500 wage base). If you also pay $1,000 or more in cash wages to household employees in any calendar quarter of 2025 or 2026, you owe FUTA tax, usually 0.6 percent of the first $7,000, or $42 a year per employee. On $36,000 of wages that is $5,508 of Social Security and Medicare tax plus $42 of FUTA, $5,550 on Schedule H, of which $2,796 is your own cost.
What is the nanny tax threshold for 2025 and 2026?
For Social Security and Medicare tax the threshold is $2,800 of cash wages paid to any one household employee in 2025 and $3,000 in 2026. Once you reach it, the tax applies to all cash wages paid that year, including the first dollars. FUTA has a separate test: $1,000 or more of total cash wages to household employees in any calendar quarter of the current or prior year.
Who is exempt from the nanny tax?
Wages paid to your spouse, your child under 21, or your parent are not Social Security, Medicare or FUTA wages. A parent's wages do count for Social Security and Medicare (but not FUTA) if the parent cares for your child under 18, or a child needing adult care, and you are divorced and not remarried, widowed, or married to a spouse who cannot care for the child. Wages paid to an employee under 18 are exempt from Social Security and Medicare unless household work is the employee's principal occupation; a student's household work is never the principal occupation. FUTA can still apply to an employee under 18.
Can I pay my nanny's share of Social Security and Medicare tax?
Yes. IRS Publication 926 lets you pay the employee's 7.65 percent from your own funds instead of withholding it. The amount you pay is added to the employee's wages for income tax purposes and reported in box 1 of Form W-2, but it is not counted as Social Security, Medicare or FUTA wages. Publication 926's example: on a $100 weekly wage you pay $15.30 of tax, and the employee's income-tax wage is $107.65.
Do I have to withhold federal income tax from my nanny's pay?
No. A household employer is not required to withhold federal income tax. You withhold it only if the employee asks and you agree, using the employee's Form W-4 and the Publication 15-T tables. Any income tax you do withhold is reported on Schedule H line 7 and paid with your own return.
How do I pay the nanny tax?
You report it on Schedule H with your Form 1040 and the total carries to Schedule 2. Because it is added to your income tax, pay it during the year by increasing your own Form W-4 withholding or your quarterly estimated tax payments, or you may owe an estimated tax penalty. You also need an employer identification number, a Form W-2 for the employee, and Form W-3 to the Social Security Administration.
What to Do Next
If You Are Over the Threshold
Get an employer identification number, register with your state unemployment tax agency, and start withholding the employee's 7.65% from each payday. The Nanny Tax Guide walks through the forms and deadlines.
The nanny's wages and the taxes you pay on them can count toward the child and dependent care credit or a dependent care FSA. Compare them with the Childcare Tax Benefit Calculator.
IRS Publication 926 - Household Employer's Tax Guide (2026) - The $3,000 2026 threshold, the $184,500 wage base, 7.65% each side, the family and under-18 exclusions, paying the employee's share, FUTA at 0.6% of $7,000 and the $1,000 quarterly test, and the Mary Brown and $100-a-week examples.
IRS Instructions for Schedule H (Form 1040) (2025) - The $2,800 2025 threshold, the $176,100 2025 wage base, lines 1 to 26, the 5.4% credit, Worksheet 1 (late contributions) and Worksheet 2 (California 1.2%, U.S. Virgin Islands 4.5% credit reduction for 2025).
Disclaimer: This calculator provides estimates for educational purposes only and does not constitute tax, legal, or financial advice. It applies the federal household employment tax rules in IRS Publication 926 and the Schedule H instructions to one household employee: Social Security and Medicare tax once cash wages reach $2,800 (2025) or $3,000 (2026), Additional Medicare Tax withholding above $200,000, and FUTA on the first $7,000 with the state credit and any credit reduction you enter. It does not determine whether a worker is your employee, does not compute state unemployment, disability or paid-leave taxes, workers' compensation or federal income tax withholding, and does not handle partial or late state contributions. Your Schedule H and its instructions control.