Employer (nanny) tax FAQs

Learn more about the employment taxes on child care payments to babysitters and nannies.

We’ve made this resource available to Kinside parents as an introduction to understanding the tax responsibilities on child care wages. For further learning, we encourage parents to refer to the Internal Revenue Service’s Household Employer Tax Guide, or seek professional guidance from an accountant familiar with employer/nanny tax rules.

I have a babysitter or nanny, does that make me an employer?

If you employ a babysitter or nanny in your home (or in someone else’s home as part of a nanny-share), you are considered a household employer. Whether your babysitter or nanny works part-time, full-time, only over the summer, or on an occasional, as needed basis, they are considered your employee. Regardless of if the worker is paid on an hourly, daily, or weekly basis, they are your employee. In most cases, as an employer to a babysitter or nanny, you are required to pay employment taxes.

What are employment taxes?

When you hire someone to work in your home, such as a babysitter, nanny, private tutor, or housekeeper, you are considered a household employer, and employers are responsible for paying employment taxes.

Employment taxes may include Social Security, Medicare, and state and federal unemployment taxes. The specific tax responsibilities and tax percentages are dependent upon the amount of wages paid to each household employee as well as your state’s requirements. 

How do I know if I need to pay taxes on child care wages to my babysitters or nanny?

In most cases, you are responsible to pay employer taxes, though this depends on the total wages paid to an individual. If you pay a household employee (babysitter or nanny) wages of $2,200 or more annually, then you will need to withhold and pay Social Security and Medicare taxes.

If you pay a household employee wages of $1,000 or more in any calendar quarter, then you will need to pay federal unemployment tax.

My mom takes care of my kids, do I have to pay employer taxes on wages paid to her?

Nope! Grandma is exempt. You do not need to pay employer taxes for wages paid to your parent, spouse, a child under the age of 21, or any employee under the age of 18 at any time during the tax filing year. 

What taxes do I need to withhold from my employee?

If you have a household employee, you may need to withhold and pay social security and Medicare taxes, pay federal unemployment tax, or both. Refer to your state’s tax regulations. 

Do I need to withhold federal income taxes for my babysitter or nanny?

You don't need to withhold federal income tax from your household employee's wages. But if your employee asks you to withhold it, you can. It will be your employee’s responsibility to claim income made from your family and pay applicable taxes.

What percentage do I withhold in taxes?

While Kinside processes child care payments, we are not tax pros. Please refer to the Internal Revenue’s Service’s Household Employer Tax Guide for more information on tax percentage responsibilities.

Will Kinside withhold and file employer taxes for me?

Kinside is a payment processor only, we do not withhold employer taxes on behalf of parents or withhold income taxes for care providers. 

How and when do I pay employer taxes?

There are a few DIY routes to paying your employer taxes. These include, but may not be limited to, pre-paying estimated employer taxes, quarterly payments, increasing your federal income tax withholding, or paying the amount due at the time of your federal income tax filing. Your state may have specific rules that must be followed. If DIY is not your style, check out a convenient option below.

Employer taxes seem complicated. Help!

We know working parents always have a lot on their plates, and may not have the time or energy to also be a tax accountant. There are several employer/nanny tax companies that offer services including withholding and filing employer taxes, nanny payroll, and filing new-employee paperwork. Sound like what you need? Check out SurePayroll, GTM Payroll, Savvy Nanny Payroll and NannyChex.   

I have more questions about employer tax rules.

We’d love to help, but employer taxes are not our expertise. For further learning, we encourage parents to refer to the Internal Revenue Service’s Household Employer Tax Guide, or seek professional guidance from an accountant familiar with employer/nanny tax rules.