Household Employer Guide: Are You One, and What It Means

What makes you a household employer

The IRS test is about money, not job title. If you pay someone $3,000 or more in a calendar year to work in your home, or more than $1,000 in any single 3-month period, you're a household employer for that worker — even if they also work for other families, even if you paid in cash or Venmo, and even if nobody signed a formal contract.

This applies whether the person is a:

• Nanny or babysitter with a regular schedule
• Housekeeper or house cleaner
• Home health aide or caregiver
• Personal assistant, cook, or gardener who works in your home

Not sure where you land? Take the free 15-second eligibility check — it runs the same math instantly, no sign-up.

What household employer status actually requires

Once you cross the threshold, a few things typically follow:

• Withhold and pay Social Security and Medicare (FICA) — 7.65% from the employee's pay, matched by another 7.65% from you
• Pay federal unemployment tax (FUTA) — usually 0.6% of the first $7,000 in wages, once you've paid $1,000+ in any calendar quarter
• Get a federal EIN so you can report these taxes under your household, not your Social Security number
• File Schedule H with your federal tax return, and give your employee a W-2 by January 31
• Check your state — many states have their own unemployment tax, and some require paid leave, workers' comp, or minimum wage rules specific to household employees

None of this requires a $50/month payroll company. It requires knowing the numbers and doing a few things on time.

What you're not required to do

A few common misconceptions worth clearing up:

• You don't have to withhold federal income tax unless your employee asks you to — Social Security and Medicare are required, income tax withholding is optional
• You don't file quarterly tax returns like a business — most household employer taxes are reported once a year, with Schedule H
• You don't need a business bank account, a business name, or a corporate structure — you're an employer as a person, using your own Social Security number for your own taxes and an EIN just for household employment

What happens if you skip this

Paying under the table doesn't remove the requirement — it just delays it. If the IRS or your state catches up later, you can owe back taxes, penalties, and interest, and your employee misses out on Social Security and unemployment credit for work they actually did.

If you've already been paying someone without doing this, the fix isn't to panic — it's to start now and handle the catch-up separately. See our catch-up payroll guide for how that usually works.

Frequently asked questions

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