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The real cost of private care

The hourly rate is the easy part. This shows what a private hire actually costs once the employer tax obligations most comparisons leave out are counted.

Private Hire — Real Annual Cost
Caregiver wages (52 weeks)—
+ Your employer share of FICA (7.65%)—
+ Federal unemployment tax (FUTA, if applicable)—
True annual cost of private hire—
OptionAnnual Cost
Private Hire (true cost, incl. taxes)—
Agency (~$34/hr national median)—

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Where these numbers come from

Private caregiver rates nationally run about 20-30% below the agency median of roughly $34/hour, based on 2026 industry data. This calculator uses a $25/hour default for private hire — adjust it to your actual local rate. The tax figures are the real, current 2026 IRS household-employer thresholds: a $3,000 annual wage threshold before Social Security and Medicare taxes (FICA) apply, split 7.65% employer / 7.65% employee, plus federal unemployment tax on the first $7,000 in wages if you pay $1,000 or more in any calendar quarter.

This calculator does not include the value of backup coverage, liability insurance, or bonding that an agency provides — those are real but not easily reduced to a single dollar figure. See the full guide for that side of the comparison.

Frequently Asked Questions

Why does the agency option sometimes cost less than expected here?

Because the private-hire total now includes the real employer tax obligations most comparisons ignore — narrowing the gap between the two options more than a simple hourly-rate comparison would suggest.

What if I stay under the $3,000 annual threshold?

If total wages to one caregiver stay below $3,000 for the year, the FICA obligation doesn't apply — this calculator reflects that automatically based on your hours and rate.

Does this calculator account for a payroll service fee?

Not by default, since not everyone uses one. If you're using a household payroll service, add its typical monthly fee (often $40-$100/month) to the private-hire total yourself for a fully accurate comparison.

More resources: Private Caregiver vs. Agency Guide · In-Home Care Costs · Full Cost Comparison

This calculator provides general estimates based on 2026 national data and current IRS thresholds, and is not tax, legal, or financial advice. Confirm your specific obligations with a tax professional, since state rules and individual circumstances vary.