Started Paying Late? A Guide to Catching Up on Household Payroll
If you've already been paying a household employee without withholding or reporting taxes, the fix is to start doing it correctly now and separately reconstruct the earlier period using whatever records you have — bank transfers, Venmo history, or your own notes — rather than trying to fix everything retroactively through your current payroll going forward.
Why starting now matters more than fixing the past perfectly
Every quarter you wait adds complexity, not less. The single most valuable thing you can do is start calculating and setting aside taxes correctly for pay going forward, today — not wait until you've fully reconciled history.
Reconstructing what you already paid
For the period before you got set up properly, gather what you can:
- Bank or Venmo/Zelle/Cash App transaction history showing amounts and dates paid
- Any informal notes on hours worked, even approximate ones
- Your employee's own records, if they kept any
A tax professional can help you determine what's owed for that period and the best way to file it — this often looks different from a routine, on-time filing, so it's worth getting help rather than guessing.
What this looks like going forward
Once you're caught up on the back period (or working with a professional on it), set up your household properly for everything from here forward: get your EIN, invite your employee to enter their own details, and start recording every payday.
What Sadie does and doesn't help with here
Sadie is built for calculating and recording paydays going forward. Reconstructing and filing for a prior, unreported period isn't something we automate today — that's exactly the kind of situation where a household employment tax professional earns their fee.
Frequently asked questions
Will I get in trouble for not doing this from the start?
It's possible to owe back taxes, penalties, and interest for the unreported period, but voluntarily fixing it going forward is viewed very differently than being caught by an audit. Getting current matters.
Can I just start today and ignore the earlier period?
You can start going forward immediately, but the earlier period doesn't disappear — it's worth addressing with a tax professional rather than leaving it unresolved.
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Get everything from today forward right, while you sort out the rest.
Set up your household in Sadie in about a minute — hours in, taxes calculated, from your next payday on.
This guide is general information, not tax or legal advice. Rules vary by state and change over time — confirm anything specific to your situation with a licensed professional or your state's labor department.