I have a domestic worker (aide, elder care giver, housekeeper) working in my home. What taxes do I need to pay?
The following information applies to household workers whom you pay directly. If you contract these services through a third party and make all payments to the third party you are not legally the employer of the caregiver.
The "Nanny Taxes" are not just for nannies! Examples of household employees include housekeepers, senior caregivers, companions, and more. In general, the Internal Revenue Service requires payroll tax filings by a domestic employer who pays a household employee directly more than $1900 (2014)* cash wages in a calendar year. These payroll tax obligations may include:
- Social Security & Medicare Taxes also known as FICA tax (7.65% of Gross Wages)**
- Federal Unemployment Tax (FUTA) (0.8% of Gross Wages or less in Most Circumstances)
- State unemployment and disability insurance taxes levied on the employer.
Examples of job titles that are typically considered household employees include aide, companion, housekeeper, cleaning lady (individual), maid, cook, personal assistant, household manager, caretaker, butler, valet, and driver. We provide more information about distinguishing a household employee from an independent contractor here.
(* The wage payment threshhold that obligates a family to pay the nanny taxes is indexed and may change annually.)
» Free Tip Sheet: Privately Employing Homecare Workers
» Free e-Book: Household Payroll Quick Start Guide
» Calculate Household Payroll Taxes