How much does a nanny really cost with taxes?
Updated November 6, 2026 · For 2026 · General information, not tax or legal advice
The hourly rate is only part of it. Here is everything a household employer pays in 2026, with a worked example.
Employer taxes
- Social Security and Medicare match: 7.65% of all wages (6.2% Social Security up to $184,500 of wages, 1.45% Medicare on everything).
- Federal unemployment (FUTA): 0.6% of the first $7,000 per employee, so at most $42 a year, assuming you pay state unemployment tax on time.
- State unemployment (SUI): a new-employer rate on a state wage base. Florida is 2.7% on the first $7,000 ($189); New York roughly 4% on the first $13,000; Washington and others use higher bases. Your state guide has the rate.
- State programs in some states: paid family leave or disability premiums, partly employer-paid in states like New York, New Jersey, Washington, Massachusetts and Colorado.
Together these run 9% to 12% of gross wages.
What comes out of the nanny's pay
The nanny's 7.65% Social Security and Medicare, any federal income tax they asked you to withhold, state income tax where required, and employee-side program premiums. These reduce take-home pay; they do not add to your cost.
Example: $25 an hour, 40 hours, Florida
- Gross wages: $1,000 a week, $52,000 a year
- Social Security and Medicare match: $3,978
- FUTA: $42
- Florida reemployment tax: $189
- Employer total: about $4,200, or 8.1% (Florida is on the low end because it has no income tax and a small unemployment base)
- Nanny's take-home before income tax: $923.50 a week
The same nanny in New York costs the family roughly $5,000 in employer taxes and has state income tax and paid family leave withheld from their check. Use the calculator for your state and rate.
Offsets
A dependent care FSA of $7,500 saves a 24%-bracket family about $2,400 a year; the child and dependent care credit helps families without one. For most families the net cost of legal payroll is $1,500 to $3,000 a year, often less than the overtime a vague salary arrangement would owe.
Other costs to budget
- Overtime at 1.5× over 40 hours for a live-out nanny.
- Guaranteed hours and paid time off; see guaranteed hours and PTO and holidays.
- Workers' compensation insurance where your state requires it for household employers (often a rider on your homeowner's policy).
- Mileage reimbursement if the nanny drives their own car.
- Payroll help: $14.99 a month for CareTab, or $45 to $80 for a full-service company.
Frequently asked
What percentage do nanny taxes add to the cost?
About 9% to 12% of gross wages for the employer side, depending on your state's unemployment rate and wage base. The nanny's own 7.65% comes out of their pay, not on top.
What is the total cost of a $25-an-hour nanny?
At 40 hours a week, gross wages are $52,000 a year. Employer taxes add roughly $4,200 to $5,500, for a total of about $56,000 to $57,500 before any child care tax breaks.
Do tax breaks offset it?
Often most of it. A $7,500 dependent care FSA saves around $2,400 for a family in the 24% bracket, and the child care credit covers families without an FSA.
Pay your nanny legally for $14.99/month
Hours, paychecks with every federal and state tax computed, pay stubs, PTO, and a filing calendar with the figures pre-filled. 14-day free trial, no card needed.