If you had a nanny, did you gross them up so they made a certain amount per hour? For example, if you want to pay a nanny $13 hour, did you pay $13 and then withhold based on that or did you gross up so that the nanny would net $13 an hour after tax?
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We pay our agreed rate and withhold based on that. BUT the complication is that we wanted to be sure that she was receiving time-and-a-half overtime pay for hours over 40 (our nanny works 45 hours a week) so we would be in compliance with state law. We agreed on an effective hourly rate and then did the math so that she gets paid that rate in total when you figure in time-and-a-half for those 5 hours... does that make sense?
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I think it depends on how much you want to spend and what you and the nanny agree on. You could offer $13/hour taxed, or maybe $15/hour untaxed (for example) because you'll end up spending less money. But if you want to spend a max of $13/hour, you'll have to figure out how much that breaks down to per hour if it includes taxes.
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