Nanny Tax DeskPaying a nanny in cash in 2026
Cash pay is still wages. To the IRS, "cash wages" include pay by check or money order as well as cash, and the same $3,000 line applies. On $30,000 paid in cash you owe about $2,337 in employer taxes, and $2,295 for the nanny's half.
General information from IRS Publication 926, not tax advice. Check with a tax professional for your household.
$30,000 paid in cash
- Your halfSocial Security $1,860 and Medicare $435.
- Federal unemployment$42, on the first $7,000.
- The nanny's half$2,295. If you never held it back, you can still pay it yourself; it then counts as more wages in box 1 of the W-2.
- What it costs not toA family that should have withheld and paid generally owes the taxes anyway, and the IRS may add interest and penalties.
Food and lodging you give are not cash wages and don't count toward the $3,000. Checks and money orders count as cash wages.
General information from IRS Publication 926 (2026), not tax advice. Check with a tax professional for your household.
Questions people ask next
Can I pay my nanny on a 1099 instead?
A nanny who works in your home on your schedule is usually a household employee, so the IRS expects a W-2, not a 1099. Calling the job a contract does not change that.
I didn't pay nanny taxes for an earlier year. What now?
Schedule H for an earlier year is filed with an amended return, Form 1040-X, along with the W-2s you missed. A tax professional can help with the back years.
Does it matter if my nanny wants cash?
No. The duty to report and pay is the employer's, whatever the worker prefers.
Why would my nanny want it reported?
Reported pay builds their Social Security and Medicare record, and gives them a W-2 as proof of income.