If you have a household employee that you paid to do work in your home, you may need to withhold Medicare and Social Security taxes from their wages. You may also need to pay unemployment taxes (federal and/or state) for the household employee.
Who is considered a household employee?
A household employee is a person you hire to do household work in your home and you can control (whether you do or not) what work is completed and how it is done. If you hired someone through an agency and the agency controls the work performed, the person is an employee of the agency and not your household employee.
What is the tax rate for household employment tax?
To calculate the employment taxes you are required to pay on the wages, complete the Household Employment Tax form. The employers share of the tax is 7.65%.
- Social security tax is 6.25%
- Medicare tax is 1.45%.
You can also report any amount due for unemployment taxes you may owe. Federal unemployment tax is 6% of cash wages up to $7,000. State unemployment tax is not calculated on this form. Contact your state unemployment tax agency to determine if you need to pay state unemployment tax.
The taxes will be added to your return and included in your total amount due or refund.
Do not file Schedule H if you file Form 941, 943 or 944.