I have a housekeeper working in my home. What taxes do I need to pay?
In general, the Internal Revenue Service requires payroll tax filings by a domestic employer (household employer) who pays a housekeeper or other household employee more than $2,300 cash wages (2021) in a calendar year*. These 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 payroll taxes may include:
- Social Security & Medicare Taxes
- Federal Unemployment Tax (FUTA)
- State unemployment and disability insurance taxes levied on the employer.
Examples of job titles that are typically considered household employees include nanny, babysitter, companion, housekeeper, cleaning lady (individual), maid, cook, personal assistant, senior caregiver, house manager, caretaker, butler, valet, and driver.
Are you a domestic employer?
We provide more information about distinguishing a household employee from an independent contractor here.
(* Nanny tax rules and tax wage updates, including the wage payment threshold that obligates a family to pay the nanny taxes, is indexed and has changed many times over the years.)
Video: What are the Nanny Taxes?