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Why You Can’t Guarantee Your Nanny Net Pay

If you’ve recently hired a nanny and agreed to compensation based on take-home pay (net pay), you may have noticed getting a consistent cost of payroll is more challenging than you anticipated. Here are some reasons you can’t guarantee your nanny the same net pay every time.  

Income Fluctuation

Your nanny is an hourly employee by law, which means when her hours vary her income will fluctuate as well. Tax withholding calculations are based on the annualized amount of income earned in a given pay period. Generally speaking, higher annual earnings mean more must be withheld to meet an employee’s tax obligation for a given year.  Because these calculations are done each pay period, but always annualized, one paycheck with a bonus or a large amount of overtime paid will probably result in a larger percentage withheld for income taxes.  

Changes in Tax Code

Throughout the year, federal and state tax codes may adjust. This will impact the amount of money withheld, therefore causing net pay to differ from a prior pay period when a state implements, or changes a given tax.

Change in Tax Filing Status

Changes in your nanny’s personal or financial situation may also impact withholdings. If your employee changes their tax filing status by getting married, divorced, or decides to change whether she file separately or jointly, her tax withholdings will also need to change. This is true if she welcomes a new child into her family or an older child leaves home and can no longer be claimed as a dependent. When these changes occur, an employee should update their federal W4 and state tax withholding forms with their employer. Doing this will change the withholding calculations, and therefore net pay. 


Finally, where work is performed and where your nanny lives can affect net pay. Moving to a different jurisdiction means taxes new taxes may apply, and others may go away.  Some local governments tax you based on where you work, and others do so based on where you live. Changes to either can alter your employee’s paycheck eve if her gross pay has not changed.

\How do you ensure you and your nanny are both on the same page when it comes to your wage agreement? The best way to do this is to agree on a gross (before tax) wage instead of a net wage and memorialize it in a written work agreement. If you are not sure how to arrive at a gross figure, you can reach out to HomeWork Solutions, and we would be delighted to help.

There are many details involved in paying your nanny accurately and on time. We understand it can be puzzling at times! That’s why you can turn to our experts at HomeWork Solutions. We know all the inner workings of tax laws and the various changes that come with them. We can handle all the details, so you don’t have to worry about it, including your employee’s withholdings, as well as your employer obligations. We can take care of submitting your quarterly or yearly tax filings and can also set up automatic payroll for your nanny. Household employers around the country rely on us, so their tax compliance items are taken care of accurately and on time.  

Contact us today at 1-800-626-4829 or visit us at to learn how to help with your nanny’s payroll.