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Do I have to Pay Taxes for my Cleaning Lady?

There are many pros and cons of hiring a cleaning lady. On the plus side, you can cut back on your personal responsibility for household chores. From dusting to waxing the floors, there is somebody who can provide assistance.

Conversely, you have to consider the financial drawbacks. Not only do you have to pay this person a competitive rate, but you may also have tax responsibilities.

Just the same as a nanny, there are situations in which you are responsible for paying taxes for a cleaning lady.

It doesn't matter if your cleaning lady works for you full or part-time, if you pay the person more than $2,000 in a single calendar year, you are considered a household employer. For this reason, there are a few things you need to do:

  • Deduct Medicare taxes and Social Security from the wages paid (7.65%).
  • Pay the employer portion of Medicare taxes and Social Security, which equals 7.65% (for a total of 15.3% of gross wages).
  • Pay state unemployment taxes (if required).
  • Pay federal unemployment tax (if required).

​​Not Interested in Paying Taxes?

If you are seeking a way to avoid paying taxes for your cleaning lady, there are a couple of options to consider.

First off, you can hire the person as an independent contractor, as opposed to an employee. The problem with this is that most household workers must be classified as employees, not contractors, since you provide direction regarding the work to be completed.

Your other option is to hire a cleaning lady through a professional service. This means you have no control over who is sent to your home to complete the work. Subsequently, you don't have payroll tax obligations.

If you are required to pay taxes for a cleaning lady, don't hesitate to comply with the laws and regulations outlined by the IRS, as well as your state and local taxing authorities. Neglecting to pay the appropriate taxes as a household employer can result in stiff penalties.