If you pay your nanny or other household employee $2,000 (2016) or more in a year, you are required to pay state and federal taxes.
Taxes required to withhold, file, and pay:
- Social Security
- Medicare
Other taxes GTM strongly recommends withholding (but are not required):
- Federal Income Tax
- State Income Tax
- Local Taxes, such as the New York City Local Tax
In New York, household employers are responsible for the following four taxes, to be added on top of the employee’s gross wage:
- Social Security Tax Rate of 6.2%
- Medicare Tax Rate of 1.45%
- Federal Unemployment Tax Rate of 0.6%
- State Unemployment Tax Rate of 4.1%
Calculation Example: Employee earns a gross salary of $850 per week:
| EMPLOYEE GROSS TO NET CALCULATION | PER PAY PERIOD |
| Weekly – 52 pay periods per year | Gross Pay $850 |
| Federal Income Tax | $101.32 |
| Social Security | $52.70 |
| Medicare | $12.33 |
| State Income Tax | $36.17 |
| Local Income Tax | $22.93 |
| Employee Take-Home Pay | $624.56 |
| EMPLOYER TAXES | PER PAY PERIOD |
| Federal Unemployment* | $5.10 |
| Social Security | $52.70 |
| Medicare | $12.33 |
| State Unemployment** | $34.85 |
| Employer Responsibility | $104.98 |
| Total Employer Responsibility | $954.98 |
* On first $9,000 of gross wages/calendar year
** On first $10,500 of gross wages/calendar year
Through our partnership with GTM Payroll Services, we have arranged for you to receive a FREE payroll and tax consultation. Their experts will walk you through your responsibilities step-by-step. Call GTM at (888) 432-7972 and mention our agency to receive a special discount!
Contact us at (518) 348-0400 if you have any questions or need more information.