Most of nanny payroll works the same way year to year — the same forms, the same 15.3% FICA math, the same Schedule H at the end. But a few of the numbers reset every January, and 2026 brought a couple of changes worth knowing before you run your first pay period of the year.

1. The FICA wage threshold rose to $3,000

The dollar amount that triggers Social Security and Medicare taxes went up. For 2026 it's $3,000 in cash wages to a single household employee during the year, up from $2,800 in 2025. Cross that line and you owe FICA on the wages — and it applies to the full year's pay, not just the amount above the threshold.

The federal unemployment (FUTA) trigger did not change: you owe FUTA once you pay $1,000 or more in cash wages in any single calendar quarter.

2. The Social Security wage base went up

Social Security tax (the 6.2% half of FICA) only applies up to an annual wage base, which climbed to $184,500 for 2026 from $176,100 in 2025. For almost every nanny this is a non-issue — a household employee would have to earn more than $184,500 from you in a single year before the cap mattered. The Medicare portion (1.45%) has no wage cap.

3. The Dependent Care FSA limit jumped to $7,500

This is the big one for families. For the first time since the 1980s, the Dependent Care FSA limit increased — from $5,000 to $7,500 per household for 2026 ($3,750 if married filing separately). If your employer offers a Dependent Care FSA, you can now run up to $7,500 of your nanny's wages through it with pre-tax dollars, which can save a meaningful chunk on federal income and FICA taxes.

The higher limit only helps if your employer actually adopts it — plans can keep the old $5,000 cap. Check your benefits portal, and remember FSA money doesn't roll over, so don't elect more than you'll spend.

House is set to the current year's thresholds and rates, so your withholding and Schedule H figures use the right numbers automatically.

Run 2026 payroll free

What stayed the same

  • FICA rate: still 15.3% total — 7.65% withheld from your nanny, 7.65% paid by you.
  • FUTA: still 6% on the first $7,000 of wages, effectively 0.6% after the standard state credit.
  • The forms: W-4 and I-9 at hire, pay stubs each period, W-2/W-3 at year-end, Schedule H with your 1040.
  • Classification: a regular nanny is still a W-2 employee, not a 1099 contractor.
Tax figures change every year and this isn't tax advice. Always confirm the current numbers against IRS Publication 926 before you file.

The bottom line

For 2026: a higher wage threshold ($3,000), a higher Social Security cap ($184,500), and a much larger Dependent Care FSA ($7,500). The mechanics of running payroll didn't change — just plug in the new numbers and keep going.