Stupid Nanny Tax Question!

[Anonymous]

Hi all,
I am new to this, so please forgive my dumb question!

I am looking to hire a nanny part time starting late next fall/early winter. Ideally, we would offer $18/hour. Now, with taxes, I realize that we would end up paying slightly more than that -- and our nanny would get slightly less than that -- once Social Security, Medicare, FUTA, and unemployment taxes are paid. Here's my question: Is the hourly rate pre-tax? So, for example, if I found a nanny who would work for $18/hour, would she expect to get paid, say, $18.50 (or whatever, my math is bad) to compensate for the fact that these taxes would get taken out? Or is the $18/hour rate including taxes that are taken out?

I know this post sounds moronic -- like I said, I am new to this! Any help you could provide would be most appreciated! Thanks!

[Anonymous]

$18/hr means just that. It does include taxes.

[Anonymous]

I know this post sounds moronic -- like I said, I am new to this! Any help you could provide would be most appreciated! Thanks!

Its not a dumb questions because you will encounter quite a few nannies who want to be aid under the table or if they must do taxes want you to pay everything and guarantee them a net. Don't do this! There are plenty of more professional nannies for that rate who understand taxes.

You want to negotiate and contractually guarantee the gross ($18) amount, not cycle up to guarantee a net amount. You can create a sample pay stub to show your nanny what this year's withholding would be from her pay stub.

As an employer of one household employee you are only required to withhold SSN/Med not state and federal income tax. If you are good with taxes and organized, you can offer to do this for the nanny but understand that she must provide with her deductions etc. You have no idea what her additional may be and you don't have enough info to know which deductions she should take. If you are not comfortable doing this, you are not required to do it. Most nannies seem to want the most in the check and prefer not to withhold anyway. Not sure why but it is what it is.

[Anonymous]

First I want to say I respect your decision to follow the law and pay taxes. I have encountered many families who are unwilling to even consider paying taxes and it is beyond frustrating.

When you start looking for a nanny just make it clear to each candidate that the rate you are offering is the gross rate. Then there won't be any confusion, and individual candidates can run it through a paycheck calculator to see what the net wage would be for their particular situation.

[Anonymous]

You won't have a problem if you hire a real nanny who knows the laws.

[Anonymous]

Yes, taxes must be paid for stupid nannies too.

[Anonymous]

Thanks, all, for your very helpful responses! I really appreciate it -- and I'm sure I'll be back with more questions. Thanks again!