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Washington Fact Sheet Household Tax Compliance Tips



Payroll tax compliance for your new employee does not need to be terrifying, time consuming or expensive. HomeWork Solutions is a nationally recognized “household payroll” service company, providing household employers nationwide with trusted and time saving payroll and payroll tax solutions.




You become a household employer when you hire an individual to perform duties and provide services under your direction in your private home. Generally, these workers are your employees, not independent contractors. Failure to properly classify the worker and make the appropriate employment tax filings and payments is considered tax fraud by the IRS.



You are responsible for federal employment taxes when you pay household workers as little as $1,000 in a calendar quarter or when you pay any individual employee age 18 or over $2,700 in a calendar year.

You have both Federal and State tax filing responsibilities. Federal employment taxes are reconciled with the household employer’s annual Federal Income tax return. Your state may require quarterly unemployment tax filings, as well as reports and remittance of state income taxes withheld, if applicable. Employee wages are reported to the Social Security Administration. Your employee is due a W-2 form in January.

Social Security and Medicare Taxes

The household employer is responsible for the payment of all Social Security and Medicare taxes to the IRS. You may choose to either collect your employee’s taxes via payroll deductions or fund these taxes yourself.

Unemployment Taxes

You will make contributions to the IRS and Washington to fund unemployment and worker re-training programs.

Income Taxes

Federal and state income taxes are ultimately the responsibility of the household employee; however, best practice is to deduct these taxes from your full time employee’s wages to help them avoid owing large sums when they file their annual income tax returns.


Verification of Work Eligibility

All U.S. employers are required to verify a candidate’s employment eligibility using Form I-9.

Fair Labor Standards Act (FLSA) Compliance

Maintain accurate and contemporaneous records including time tracking, gross pay calculations, and detailed records of all deductions from the employee paycheck.

Pay no less than minimum wage on an hourly rate basis.

Health Insurance

You are not required to provide employee health insurance, however there are financial and retention advantages to contributing some or all of your employee’s health insurance premium. HWS is happy to discuss this with you.


Minimum Wage

Washington defers to the FLSA, which requires that all domestics, excluding companions, be paid at no less than the greater of the state or federal minimum wage.

Washington minimum wage is $16.28/hr.

  • Seattle minimum wage is $19.97/hr for small employers if you do not provide healthcare benefits. If you provide healthcare benefits, it is $17.25/hr.
  • SeaTac minimum wage is $19.71

Overtime Pay

All live-out workers are to be paid an overtime differential of 1.5 times the hourly wage for hours over 40 in a work week. Live-in domestics, again excluding companions, must be paid their hourly wage for all hours worked, without an overtime differential. Overtime or premium pay is not required for hours worked in excess of 8 per day or on weekends or holidays.

Paid Time Off

Washington requires all employees to accrue paid sick leave at 1 hour for every 40 hours worked. Employees can use the leave after the 90th day of employment. Unused leave of up to 40 hours must carry over to the next year.

The Washington Paid and Family Medical Leave program allows qualified employees to receive up to 12 weeks of paid leave for:

  • Bonding after the birth or placement of a child.
  • An employee’s serious health condition.
  • A serious health condition of a qualifying family member.
  • Certain military events.

The benefits provided by the program are a percentage of the employee’s gross wage (between $100-1000 a week) while they are on approved leave. Employees must have worked a total of at least 820 hours for any Washington employers during the previous 12 months to receive benefits. The program is funded by an employee and employer tax on those with more than 50 employees.

Mileage Reimbursement

The federal government establishes and updates a maximum rate for non-taxable mileage reimbursement each year.  The current rate is $0.67 per mile.

Payroll Frequency

Washington allows you to pay your household worker daily, weekly, bi-weekly, semi-monthly, or monthly. HWS recommends a weekly or bi-weekly pay cycle. Pay upon separation is due on the next scheduled pay date.

Payroll Documentation

Each time you pay an employee, you must provide them with an itemized statement showing the pay basis hours worked, rate or rates of pay, gross wages, and all deductions for that pay period.

Employment Contract Requirements

Washington does not have employment contract requirements. However, a free sample work agreement can be found here.

Workers’ Compensation Insurance

Washington requires household employers to obtain Workers’ Compensation Insurance when they employ 2 or more. However, HWS ALWAYS recommends obtaining a Workers Compensation Insurance policy for the protection it provides in the event of a work-related injury sustained by your employee. A policy can be obtained through the Washington Department of Labor and Industries

State Unemployment Insurance

Washington requires a new employer state unemployment insurance tax of 1.03% for the first $67,600 of wages paid to each employee. This may vary if you have previous employees.

Frequency of Tax Filings

Washington requires quarterly tax filing for unemployment insurance taxes and does not impose an income tax.

Washington also requires quarterly tax filing for the Paid Family and Medical Leave tax, regardless if you as the employer pay the tax or only your employees do.

Domestic Workers Bill of Rights (DWBR)

Washington does not have a DWBR.

  • Seattle has a Domestic Workers Bill of Rights, which gives minimum wage, rest break, and meal break rights to domestic workers. The full text of the ordinance can be viewed here.



HWS knows that most families want to pay their household employees legally and ensure that the employee receives workers compensation and unemployment insurance protections. You also want to establish a principled relationship with your employee who is caring for and interacting with precious family members. Getting the relationship started on the right footing, including complying with legal and tax formalities, helps set the tone for the relationship.