What Is a Household Employee?

A household employee, also known as a household worker, is an individual who is paid to provide a service at or within the place of🦩 residence of their employer.

Employers choose the kind of work a household employee is responsible for and the manner in which that work is expected to be completed.

If the hired individual rather than the employer were responsible for determining and completing work, the pers𒊎on would be considered by the Internal Revenue Service (IRS) to be an independent contractor and not an employee.

Understanding Household Employees

A household employee can work full-time or part-time. They can be found and hired through an employment agency or via a list provided by an agency or 澳洲幸运5官方开奖结果体彩网:labor organization. Household employees may be paid on an hourly, daily, weekly, or p💝er-job basis.

As mentioned, the IRS distinguishes between household employees and independent contractors based on whether the employer or the taxpayer determines not only the work that is to be performed b♈ut how it is carried out.

If the worker controls what they do and how they do it, they are considered to be an independent contractor, not a household worker. Such individuals provide their own tools and offer their services to the public as independent businesspeople.

Where someone works may determine whether they are a household employee or an 澳洲幸运5官方开奖结果体彩网:independent contractor. For example, a childcare worker who performs their duties in an employer's home may be a household employee. But a worker who performs the exact same services in a daycare c🍎enter would be employed byඣ that daycare center.

Examples of Household Employees

Some common examples of household employees can include the following: babysitters, caretakers, cleaning people, domestic workers, drivers, health aides, housekeepers, maids, nannies, private nurses, and som✨etimes, gardeners or yard workers.

Examples of independent contractors are repairmen, carpenters, a🌳nd plumbers. Yard workers could be independent contractors rather than household employees, or be 🥃employed by a yard service company.

Special Considerations

Taxes

As of 2024, individuals who hire a household employee to whom they pay more than $2,700 in cash wages during the tax year must withhold and send to the IRS the appropriate amount for the employee's 澳洲幸运5官方开奖结果体彩网:Social Security and Medicare taxes (the 澳洲幸运5官方开奖结果体彩网:FICA payroll tax). Employers may be required to pay taxes at the state level as well.

The withholding rate for the employee's portion of Social Security tax is 6.2% and that for Medicare is 1.45%, for a total rate of 7.65%.

In addition, and as for any other employer, the employer of a household worker must pay their 7.65% portion of the FICA tax out of their own pocket. The total tax rate is 15.3%

While the tax implications of hiring a household employee may appear complex, there are many 澳洲幸运5官方开奖结果体彩网:payroll services that can help automate some𒁏 or all of the𝓡 process.

As of 2020, new household employees must use the redesigned W-4 tax form upon hire. Those hired before 2020 do not need to fill out a new form.

The Bottom Line

A household employee is someone who is paid a ♕wage by a homeowner to provide a service at or in the household. They are directed by the employer in the type of work they perform and in the manner in which they must complete it. A household⛄ worker uses tools and/or equipment provided by the employer.

The employer will withhold ♍an amount for taxes fr♈om the wages that they pay the household worker.