Taxes for Household Employees

by | Jun 17, 2026 | Individual Tax

Concise Takeaway

A household employee exists when a taxpayer hires someone to perform household work and controls what work is done and how it is done. Employers may owe Social Security, Medicare, and FUTA taxes, reported on Schedule H.

Who Is a Household Employee

A worker is a household employee when:

  • The work is performed in or around the taxpayer’s home, and
  • The taxpayer controls how the work is performed

If the worker controls how duties are performed, the worker is self‑employed, not a household employee.

Examples of household employees

  • Babysitters
  • Housekeepers
  • Cooks
  • Yard workers
  • Domestic workers
  • Private nurses
  • Drivers

Not household work

Services performed in the home that are not household in nature, such as:

  • Private secretary
  • Tutor
  • Librarian

Workers not considered household employees

  • Workers performing childcare in their own home
  • Workers provided by an agency when the agency controls the work

Who Cannot Be a Household Employee

A taxpayer does not have a household employee if the worker is:

  • The taxpayer’s spouse
  • The taxpayer’s child under age 21
  • The taxpayer’s parent (with limited exceptions)
  • Anyone under age 18 whose principal occupation is not household work

Taxes the Employer Must Pay

A household employer may owe:

Social Security and Medicare Taxes

For 2025:

  • If cash wages to any household employee are $2,800 or more, the employer must pay:
    • 6.2% Social Security
    • 1.45% Medicare
    • Total employer share: 7.65%
  • The employer may withhold the employee’s 7.65% share or pay it themselves.
  • Social Security wage base: $176,100 (2025)
  • No wage limit for Medicare tax.
  • Employers must withhold 0.9% Additional Medicare Tax on wages above $200,000, regardless of filing status.

Federal Unemployment Tax (FUTA)

For 2025:

  • FUTA applies if total cash wages to all household employees are $1,000 or more in any quarter of 2024 or 2025.
  • FUTA rate: 6% on the first $7,000 of wages.
  • Employers may receive up to a 5.4% credit for state unemployment tax, reducing FUTA to 0.6%.
  • Only the employer pays FUTA; it is not withheld from wages.

Reporting Requirements

A household employer must:

File Schedule H

Schedule H is filed with Form 1040 if:

  • Wages were subject to Social Security or Medicare tax
  • Wages were subject to FUTA
  • Federal income tax was withheld

Taxes reported on Schedule H increase the employer’s total tax due.

Provide Form W‑2

A household employer must:

  • Issue Form W‑2 to each household employee paid $2,800 or more in 2025 or if taxes were withheld
  • File Form W‑3 with the Social Security Administration
  • Deadline: January 31 following the tax year

Obtain an EIN

A household employer must have an Employer Identification Number to report wages and taxes.

Household Employee Tax Flow Summary

  1. Determine whether the worker is a household employee
  2. Track cash wages paid during the year
  3. Apply Social Security, Medicare, and FUTA rules
  4. Withhold Additional Medicare Tax if wages exceed $200,000
  5. Issue Form W‑2 and file Form W‑3
  6. Report taxes on Schedule H with Form 1040