The Payroll Blog
News, tips, and advice for small business owners
As a household employer, you have particular responsibilities. Here is how the IRS defines this work arrangement:“ You have a household employee if you hired someone to do household work and that worker is your employee.”
Easy enough, right? Well, not really. There are a variety of details that govern this type of relationship. Here are some points to consider:
There are also times when a worker is not considered an employee. This is the case if the worker controls how the work is done. In this case, the person is considered a self-employed contractor.
There are many types of household workers, with some of the most common including:
Note: it is possible that you have more than one household employee.
For 2018, if you pay cash wages of $2,100 or more to any household employee, you are required to withhold 1.45% of Medicare taxes and 6.2% of Social Security. You are also required to pay the employer portion of both, which equals 7.65%.
Here are a few additional points regarding household employers and taxes:
When it comes to the question of whether or not you are a household employer, it is better to be safe than sorry. Failing to pay taxes and follow the regulations outlined by the IRS could lead to serious and costly penalties. Consult with your tax professional to determine your status.