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[quote=Anonymous]This is an embarrassing question but I'm new at this. We are considering hiring a nanny this fall when some friends of ours from our neighorhood will no longer be needing a nanny. I'm trying to figure out taxes, and made an initial call to the 4nannytaxes agency which some friends recommended that help with tax issues. I will be asking a few more questions of her current employer (my friend), but wanted to ask the general nanny-employing world: I understand that we need to account for SS, Medicare, and unemployment for tax purposes. We've been advised to take that total, and put it in a separate account, and pay to the IRS quarterly.

My question is this: do we as the employer deduct that from the nanny's paycheck? All of it? Some of it? In other words do we pay that on top of her salary?

I definitely want to be a good employer and treat her well. I don't want to be cheap, we are committing to a nanny with the full knowledge that our childcare costs will go up and not down (we have two in daycare currently, and the oldest is starting school and the youngest will be two this fall), but I also don't know what the standard is. I had assumed that we would withold that money and pay it to the IRS, but my husband said, well, our employer takes it out of our paycheck!

What is the standard practice....what is expected? We won't be paying health insurance because she gets that through her husband, we will be paying sick and vacation and we plan to be very generous with that). Thank you for any advice![/quote]

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