Taxes to be Paid by Household Employers

Household employers can expect to PAY employer payroll taxes of approximately 9-11% of their employee’s gross wages (Good News! Tax breaks can be more than the taxes, actually saving you money if you pay legally!). Specifically, those taxes are:

• Employer’s Half of Social Security & Medicare (7.65% of employee’s gross wages)
• State Unemployment Insurance (varies by state)
• Federal Unemployment Insurance (0.8% on first $7,000 of employee’s gross wages)
• Other State Taxes (many states have an additional tax in order to fund initiatives such as workforce development/training)

These taxes must be reported and remitted to the IRS and the state on a quarterly basis.

Taxes to be Withheld by Household Employers

Household employers are required to WITHHOLD taxes from their employee’s paycheck. Specifically, those taxes are:

• Employee’s Half of Social Security & Medicare (7.65% of employee’s gross wages)
• Federal Income Tax (based on allowances chosen by employee on Form W-4)
• State Income Tax (based on allowances chosen by employee on Form W-4)
• Other State Taxes (some states levy additional taxes to pay for things like Disability Insurance)

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We have a team of experts ready to help you with your household employee payroll taxes (also known as “The Nanny Tax”) based on your state's specific tax and labor laws. If you have any household employer tax questions or would like help calculating your employee withholding tax rate, please call our toll free Help Line 888-BREEDLOVE (273-3356). We’re here to help.