Household Employees are also named “Domestic Service Workers,” who work inside or around the house. According to Internal Revenue Service (IRS), all the Payroll Services for Household Employees include:

1) Nannies

2) Housekeepers

4) Gardener

5) Caretaker

6) Drivers and others

All the mentioned employees work around or inside to earn cash.

Minimum Wages for Payroll Services for Household Employees

As mentioned by the Fair Labour Standards Act (FLSA), every household employer should have to pay the minimum wage of $7.25 every hour, including overtime pay for shifts overstepping 40 in a week. High standards should prevail if the hour law applies to federal and state wages for Payroll Services for Household Employees.

Taxes on Payroll Services for Household Employees

Suppose you pay cash wages to household employees, with some rare exceptions. In that case, you should withhold Social Security And Medicare Taxes Refunds from their paychecks and produce your section of the taxes(it may change annually). You can also pay your employees a share of social security and Medicare taxes from your pocket if you want.

However, if employees appeal to you to withhold federal income tax, and if you agree, you should have to uphold it for the Payroll Services for Household Employees.

Documentation for Payroll Services for Household Employees

Fair Labour Standard Act (FLSA) demands that all Employers keep some essential record of their Payroll Services, including:

A) Name

B) Working hours (for both daily and weekly)

C) Social Security Number

D) Cash Wages (weekly)

E) Overtime Wages

F) The amount Employers claim for Accommodation

Work schedules and timecards must be remains for at least 2 years. This Payroll record is necessary to calculate Wages for Household Employees.

Employers Need to File a W-2

You must pay Federal Unemployment Tax if you pay total cash wages above a specific regularly to adjust the minimum to Household Employees. File a W-2 for Household Employees dependent on Social Security and Medicare Taxes.

You still must file a W-2 for Household Employees who do not depend upon Social Security and Medicare Taxes. When you file your Federal Return, you must pay all your Employment Taxes to Internal Revenue Service (IRS).

Every state has rules and regulations on Payroll Services for Household Employees on Taxes, including States Income Tax and Unemployment Tax. You should check with your state’s unemployment tax office to confirm whether or not you must pay the unemployment tax for a home employee. The amount of income tax withheld varies from state to state as well.

Federal Unemployment Tax 

If a household pays all of its employees a combined sum of $1,000 or more in any calendar quarter, up to $7,000 a year per employee,  Then the household is additionally liable for the federal unemployment tax (FUTA). This tax amounts to an extra 6% on top of your FICA contributions. After paying your employee more than $7,000 in any calendar year, you are free from concern for the remainder of the year.

FAQs

Q. How to put my Housekeeper on a Household Payroll?

You have to give the H-2 form to your Housekeeper in which you have to show every year’s wage you paid them by 31st January.

Q. According to the IRS, who falls in the category of  Household Employee?

All the employees who work inside or around the house come in the category of Household Employees. Housekeepers, caretakers, nannies, gardeners, and drivers are some of the types of Household Employees.

Q. What are the Household Payroll taxes?

If you are paying some cash wages to Household Employees, you must withhold Social Security and Medicare Taxes Refund from their paychecks. You can also pay from your pocket to Employees as a Share of Social Security and Medicare taxes.

Q. Documentation required for the Payroll Services?

According to the Fair Labour Standards Act (FLSA), all Employers keep records of their Household Employees like – Name, Social Security Numbers, Cash wages, Working hours, Overtime hours, etc.

Q. What is the amount of Minimum Wage for Payroll Services?

$7.25 every hour is the minimum wage for Payroll Services, overstepping 40 in a week, including overtime for pay shifts