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[quote=nannydebsays]Any nannies who are IC's are being taken advantage of and they and their employers are breaking the law.

An IC pays ALL of the 15.3% Social Security and medicare taxes out of his/her pocket. They have no employer to cover half of those taxes, and so they get hit with what is basically a self-employment penalty.

Let's try it this way.

A nanny who is an employee earns $100 gross. $7.65 of that goes to pay her share of SS/Med, leaving her with net earnings before other taxes of $92.35. (The employer pays the other $7.65.)

A nanny who allows herself to be labeled an IC earns $100 gross. $15.30 of that goes to pay her SS/Med taxes, leaving her with a net wage before other taxes of $84.30.

So, who exactly benefits from labeling a nanny an IC? Her employers do! THEY avoid paying $7.65 in taxes for every hundred dollars the nanny earns.

An employee who earns $50,000 a year gross loses $3825 to SS/Med a year.

An IC who earns $50,000 a year gross loses $7650 to SS/Med a year.

Be smart, and insist on being paid as an employee if you are defined as an employee!
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