Social Security? Do families cover nanny's portion?

[Anonymous]

Hi all, we are new to this area and we are looking to hire a nanny. Quite possible something is lost in translation since all of the candidates we have interviewed so far seem to be saying that as the employer, we should pay all of their social security taxes. Is this correct? I asked one of the payroll companies if in their experience employers usually paid all social security taxes for their nannies and they said that that is highly unusual, but that doesn't seem to be the current market expectation based on what we are hearing. Of course, we will cover the employer portion of social security taxes, but seems strange to me that we would be expected to cover the employee's portion too? Could anyone with some experience with this please advise? Thanks so much.

[Anonymous]

My employers pay my portion as well as theirs.

[Anonymous]

I don't think it's standard, but there is an option with my payroll company to "gross up" the taxes. Ultimately it doesn't have much meaning who pays, just the total comp. Ask your nanny what take-home pay she wants after taxes, and work backwards from there.

[Anonymous]

We don't pay our nanny's portion of the tax (we do pay our own, of course). The payroll company we work with advised us that it was unusual for employers to pay the nanny's portion of the tax as well (and also sort of complicated because then the portion you pay becomes additional taxable income for the nanny or something like that). Are you sure the nannies you are interviewing are not actually saying that the employer should be deducting the tax? We interviewed a couple who kept telling us their previous employers "paid all their taxes for them" but it turned out it meant the employers were just withholding it from their paychecks and submitting it directly (as opposed to paying the nanny the gross amount and the nanny owing a tax balance at the end of the year).

[Anonymous]

Where are you finding your nanny candidates, OP?

[Anonymous]

OP here, thanks for the information. We are finding them on DCUM, is there another place we should be looking as well? We haven't been wowed by anyone yet.

[Anonymous]

As a nanny I would never expect my employer to pay my portion of social security, federal, or state taxes. Now, I do expect to take home a certain amount per week but I know how much that is after taxes because I've taken the time to work out what my minimum hourly wage needs to be working 40 hours to make my minimum weekly rate.

[Anonymous]

No. I do not do this and do not view it as at all reasonable. I would only negotiate off gross salary - the nanny needs to determine her net like anyone else.

[Anonymous]

OP here. Thanks for all the input. Maybe I am dense then but how does it work - nannies we have interviewed tell us they expect to be paid $20 per hour "after taxes" or "in their pocket"....how do we guarantee an after tax rate of $20 per hour net? Shouldnt we be negotiating a gross number that we pay our portion of Social security tax and Medicare tax in top of and then deduct their taxes from? Sorry if these answers are obvious but we are coming from a City where nannies do not want to be paid on the books so we have never had to deal with these questions!

[Anonymous]

With any and all due respect to the people you've interviewed, I'd imagine that if they aren't smart enough to discuss GROSS wages, I can't imagine they're smart enough to be responsible for your child. Some amount of minimal English should be a basic requirement.

[Anonymous]

Nanny here. My portion of taxes are withheld from my paycheck and my employers pay their portion, just as any other job. How in the world can you guarantee what her net income will be? Just tell candidates that you will pay your portion of taxes and withhold hers and negotiate pay based on gross pay. Of course don't forget overtime, if you need it.

[Anonymous]

I would tell the next candidate you interview who asks about "net salary" that the hourly rate your offering is X and that all appropriate taxes will be deducted. Being a household employee means they are subject to the same taxes as any other employee and they should be paying their portion of all applicable taxes.

And for what its worth you're 100% doing the right thing by paying on the books and requiring your nanny to pay her portion of taxes like every other legally employed person.

[Anonymous]

MB here. We pay our nanny an hourly rate plus overtime, calculated out to a weekly salary (at her preference). This is all negotiated in gross pay. We use a payroll service that handled our appropriate tax payments and her deductions as she chooses.

We do not "gross up" and I would never do that. I think our approach is pretty typical and think what your candidates are proposing is not the norm.

We found our best nanny candidates through neighborhood listservs and word of mouth, but agencies can be a good option, or care.com, mothers/parents groups, etc...

Good luck.

[Anonymous]

MB here. We pay our nanny an hourly rate plus overtime, calculated out to a weekly salary (at her preference). This is all negotiated in gross pay. We use a payroll service that handled our appropriate tax payments and her deductions as she chooses.

We do not "gross up" and I would never do that. I think our approach is pretty typical and think what your candidates are proposing is not the norm.

We found our best nanny candidates through neighborhood listservs and word of mouth, but agencies can be a good option, or care.com, mothers/parents groups, etc...

Good luck.

another MB here. We do the same.

[Anonymous]

Another nanny here - any candidate who is negotiating in terms of net wages is inexperienced or used to being paid under the table. Experienced, professional nannies negotiate a gross wage and do the math themselves to figure out weekly take home pay. It is extremely unusual and unnecessary for you to pay any portion of the nanny's taxes; your employer contribution is all you are responsible for.