What nanny taxes do I pay in New Mexico?
Reviewed September 2026 against the same data that powers Kindred's free calculators.
If you pay a nanny $2,700 or more in a year, you owe the federal "nanny taxes": Social Security and Medicare (7.65% employer share) plus federal unemployment tax. In New Mexico, you also pay state unemployment tax of about 1% on the first $33,400 of wages. Your nanny gets a W-2, not a 1099.
Federal obligations (same in every state)
Once your nanny crosses the $2,700 annual threshold, the IRS treats you as a household employer:
- Social Security and Medicare (FICA): 7.65% paid by you and 7.65% withheld from your nanny's wages
- Federal unemployment tax (FUTA): effectively 0.6% on the first $7,000 of wages for most employers
- A W-2 for your nanny each January. Household workers are employees, not 1099 contractors, in nearly every real arrangement.
New Mexico obligations
On top of the federal rules, New Mexico adds:
- State unemployment tax (SUTA): about 1% on the first $33,400 of wages, at the typical new-employer rate
- New Mexico has a state income tax. Withholding it for a household employee is usually optional for you, but your nanny still owes it, so most families withhold as a courtesy.
- Workers' compensation: Required for household employers with 3+ employees.
Get the real number for your budget
The free Kindred nanny tax calculator applies these New Mexico rates to your actual hours and hourly rate, and shows the employer cost and your nanny's take-home side by side.
Related
- How much does a nanny cost in New Mexico?
- Do nannies get overtime in New Mexico?
- What is the nanny tax?
This page is a plain-English summary for planning, not tax or legal advice. Rates and thresholds change; confirm current figures with the IRS, your state agency, or a payroll professional before filing.