We work with payroll experts, and/or help you to handle things properly on your own.
Your family will be responsible for withholding and paying taxes on the nanny’s wages, including Social Security, Medicare, and federal and state unemployment taxes. However, when you hire a nanny through ABN, our Referral Partners will be responsible for handling the details of the nanny’s taxes. We make it painless and so informative that it is the easiest possible option for you.
Here are some of the specific tax responsibilities that Payroll experts typically handle:
- Withholding and paying Social Security and Medicare taxes (FICA): The FICA tax rate is 7.65%, with half paid by the employer and half paid by the employee. Nanny agencies are responsible for withholding and paying the employer’s share of FICA taxes, as well as collecting and forwarding the employee’s share of FICA taxes.
- Withholding and paying federal and state unemployment taxes: The federal unemployment tax rate is 0.6%, and state unemployment tax rates vary. Nanny agencies are responsible for withholding and paying both federal and state unemployment taxes on the nanny’s wages.
- Filing W-2 forms: They will help handle filing W-2 forms with the Social Security Administration and providing W-2 copies to their nannies. W-2 forms report the nanny’s annual wages and taxes withheld.
- Filing Form 940: They will help handle filing Form 940 with the IRS to report their federal unemployment tax liability.
- Filing Form 941: They will help handle filing Form 941 with the IRS to report their Social Security and Medicare tax liability.
- Making tax payments: They will help handle making timely payments of all applicable taxes to the IRS and state tax agencies.
By assisting in handling all of the nanny’s taxes, we can save families time and effort and make certain that their nannies are properly compensated and protected.
