Hiring Household Employees

Are you subject to payroll taxes?

If you have a household employee, such as a housekeeper, maid, babysitter, gardener or anyone else who works in or around your private residence as your employee, you may be required to pay payroll taxes.

Repairmen, plumbers, contractors and other business people who provide their services as indepen­dent contractors are not your employees. Household workers are your employees if you can control not only the work they do, but also how and when they do it.

If you pay cash wages of $1,900 or more in 2015 (this threshold can change from year to year) to any one household employee, you generally must withhold 6.2% of social security and 1.45% of Medicare taxes (for a total of 7.65%) from all cash wages you pay to that employee.

You also must pay your share of social security and Medicare taxes, which is also 7.65% of cash wages. Unless you prefer to pay your employee’s share of social security and Medicare taxes from your own funds, you should withhold 7.65% from each payment of cash wages made. Cash wages include wages you pay by check, money order, etc.

If you have a household employee, please let me know. I can help you fill out the proper paperwork and meet any tax filing requirements.