What taxes do we withold?

[Anonymous]

A recent contract I saw has the nanny being responsible for paying her own federal and local income taxes and the employer withholding social security, medicare and federal unemployment taxes. Is that correct? Or is the employer supposed to withhold everything?

[Anonymous]

You have to withhold fica. And you have to pay unemployment insurance. Everything else nanny can do herself and you have to pay your employer share taxes on your tax return or quarterly.

[Anonymous]

My employers withhold everything.

[Anonymous]

Anonymous wrote:A recent contract I saw has the nanny being responsible for paying her own federal and local income taxes and the employer withholding social security, medicare and federal unemployment taxes. Is that correct? Or is the employer supposed to withhold everything?

It is entirely legal, however I have always withheld the income taxes too. The payroll company we use (HWS) advised this is a best practice so the nanny is not left owing a lot of money with her tax returns. Since we pay a guaranteed wage it is easy, we write the same check every week.

[Anonymous]

Withholding Fed and state tax is not required by law but it seems to be the standard practice (otherwise nanny pays a large lump sum when she files income taxes). We do it. Withholding FICA (social security + medicare) is required. Fed and State unemployment tax is required and employer pays it separately (it is not a withholding). Unemployment insurance is something different and depends on jurisdiction.