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Are you a household employer?

What Your Family Needs to Know…

At HWS, we are experts on the tax and labor laws surrounding household employment, so you don’t have to be. Let’s first determine whether YOU are a household employer. Our knowledge center goes into much more depth on the details, here it is short and simple.

Our lives are busy, and we often hire someone to help us around the house. It could be the nanny you hired to care for your newborn when you returned to work, the housekeeper to keep your home clean and organized, or even the caregiver you hired to assist with your disabled father. In almost all these situations, if you pay the worker directly and have the right to direct the work they do, you ARE a household employer.

Publication 926

A household employer is an individual who hires a nanny, babysitter, maid, housekeeper, gardener, cook, personal assistant, senior caregiver, or other individual to perform duties and provide services within your private home, and who pays a household employee more than $2,700 cash wages in a calendar year (2024).

These household payroll taxes are collectively referred to as “nanny taxes”, although as a practical matter these employment taxes are applied to all US employees. The employer’s nanny payroll tax obligations may include:

  • Social Security & Medicare Taxes
  • Federal Unemployment Tax (FUTA)
  • State unemployment and disability insurance taxes levied on the employer.

Occasionally you, or your employee, would prefer to treat the worker as an “independent contractor” and just issue a Form 1099 to avoid the employer payroll tax filings. This misclassification is very common, and carries costly risks to both the household employer and to the worker herself.  Learn more about distinguishing a household employee from an independent contractor here.

Video: Nanny Payroll Tax Checklist

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