Nanny Tax Calculator

Guide to Using the Nanny Tax Calculator

Step-by-Step Instructions

Step 1: Start by entering the annual salary of the nanny. Go to the field labeled “Annual Nanny Salary ($)”. This information is crucial for calculating taxes. Make sure that the number you enter is between $0 and $1,000,000, as these are the specified limits. Remember, this field is required.

Step 2: Next, select the state where the nanny is employed. Under “State of Employment”, choose the state from the dropdown list. States have different tax rates, so it’s important to select the correct one. Since this is a mandatory field, ensure you don’t skip it.

Step 3: Move on to input the number of hours the nanny works weekly. In the field “Hours Worked Per Week”, enter the number of hours. It should be a number between 1 and 168. This is important for understanding their pay structure, and this field is also required.

Step 4: Lastly, you need to select the frequency with which the nanny is paid. Under “Pay Frequency”, choose from Weekly, Bi-weekly, Semi-monthly, or Monthly. The pay frequency will affect how the taxes are distributed per pay period.

Result Interpretation

Once you’ve entered all the required information, the calculator will compute various taxes and break them down as follows:

• Social Security Tax (6.2%): This amount is calculated as 6.2% of the annual salary.
• Medicare Tax (1.45%): This amount is calculated as 1.45% of the annual salary.
• Federal Unemployment Tax (FUTA): This is calculated as 6% of the annual salary, capped at $420.
• State Unemployment Tax: Calculated using the selected state’s tax rate applied to the annual salary.
• Total Employer Tax Responsibility: This is the sum of all the above taxes.
• Tax Per Pay Period: The total employer tax divided by the number of pay periods based on the selected pay frequency.

The results are shown in a clear currency format for easy understanding, allowing you to see the financial commitment involved in employing a nanny.