Do Social Security and Medicare Taxes Apply To Household Employees?
Social Security and Medicare taxes together are commonly referred to as the “FICA” tax. This is a 7.65% tax both employees and employers pay into the FICA system. Your FICA tax gets automatically taken out of each paycheck, normally by your employer, and is reflected as such on your paystubs.
If you have household employees, and pay them cash wages of $2,400 or more in the year 2022, you too are obligated to withhold 7.65% ( 6.2% for social security and 1.45% for Medicare taxes) from all cash wages you pay that employee. If you prefer, you can pay your employee their share of the FICA tax on your own from your own money. This does not absolve you from paying your own FICA tax though — as an employer, you must also pay your share of the FICA tax, which is the same 7.65% of cash wages.
You do not have to pay your spouse, your child who is under age 21, a parent (although some exceptions apply), or an employee who is under the age of 18 at any time during the year in which you would be claiming them. Certain exceptions apply to those under the age of 18, such as if household work is the minor’s main occupation. If they are a student, and are an employee in your household as well, the work is not considered their principal occupation — being a student is considered as such.
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Those who do qualify as household employees include housekeepers, maids, gardeners, babysitters and others who work in your own home or private residence. Employees like plumbers and repairmen do not count as your personal employees, as they provide work to you as independent contractors and have their own employers.
The IRS states: “Household workers are your employees if you can control not only the work they do, but also how they do it.”
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