To legally pay a housekeeper, you treat yourself as a household employer: get an Employer Identification Number, verify your housekeeper’s eligibility to work, withhold and match Social Security and Medicare taxes once you pay $3,000 or more in cash wages during the year, pay federal and state unemployment tax, and report everything on Schedule H with your personal tax return plus a W-2 for your employee. The threshold is lower than most people expect, and the paperwork is manageable once you know what each form does.
Is Your Housekeeper Legally Your Employee?
Almost always, yes. The IRS looks at how much control you have over the work: who decides what gets cleaned, when it happens, and how it gets done. If you set the schedule, direct the tasks, and provide the supplies, you have an employee rather than an independent contractor.1Internal Revenue Service. Independent Contractor (Self-Employed) or Employee?
In practice, the vast majority of housekeepers who come to the same home on a recurring schedule are employees. A one-time cleaning service that sends its own crew and manages its own workers is different; that company is the employer, not you. The distinction matters because misclassifying an employee as a contractor can make you liable for every dollar of back tax plus penalties.
Paperwork Before the First Paycheck
Four things need to be in place around your housekeeper’s start date. None of them cost money if you do them yourself.
Get an EIN
You need an Employer Identification Number from the IRS to report wages and pay employment taxes. Apply online and you’ll have one in minutes, free.2Internal Revenue Service. Get an Employer Identification Number Ignore third-party sites that charge a fee; the IRS never charges for an EIN.
Complete Form I-9
Federal law requires you to verify your housekeeper is authorized to work in the United States. Your employee fills out their section on or before day one, and you review their original identity and work-authorization documents and complete your section within three business days of their start date.3U.S. Citizenship and Immigration Services. Completing Section 2, Employer Review and Attestation Keep the completed I-9 for three years after the hire date or one year after employment ends, whichever is later.4USCIS. 10.0 Retaining Form I-9
Have Your Housekeeper Fill Out a W-4
Here’s a detail that catches people off guard: you are not required to withhold federal income tax from a household employee’s wages. You only do it if your employee asks you to and you agree.5Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide If you both agree, the W-4 tells you how much to pull from each paycheck. Either way, having the completed form on file is good practice.
Report the New Hire
You must report every new hire to a state agency within 20 days of their start date, and some states set shorter deadlines.6Administration for Children and Families. New Hire Reporting The data feeds child support enforcement and benefit fraud detection. Most states take the report through an online portal that takes a few minutes.
The Taxes You Owe Once Wages Hit $3,000
Once you pay a household employee $3,000 or more in cash wages during 2026, you owe Social Security and Medicare taxes on every dollar you paid that year, including the first $3,000.5Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide These are often called the “nanny taxes.”
The rates:
- Social Security is 6.2% from your employee’s wages plus a matching 6.2% from you. The wage base for 2026 is $184,500.7Social Security Administration. Contribution and Benefit Base
- Medicare is 1.45% from the employee and 1.45% from you, with no wage cap.
Together FICA runs 15.3%, split evenly. You can withhold your employee’s 7.65% share from each paycheck or cover it yourself. If you pay their share, those payments count as additional taxable income to your employee for income tax purposes, though not as wages for Social Security, Medicare, or unemployment calculations.8Internal Revenue Service. 2025 Instructions for Schedule H – Household Employment Taxes
If you pay below the $3,000 threshold, you generally don’t owe federal Social Security or Medicare on those wages. State obligations can still apply at much lower wage levels, so check your state before assuming you owe nothing.
Federal Unemployment Tax
If you pay $1,000 or more in total cash wages to household employees in any calendar quarter of 2026, you owe Federal Unemployment Tax on each employee’s first $7,000 of annual wages.5Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide The nominal rate is 6%, but if your state runs an approved unemployment program (almost all do), you can claim a credit of up to 5.4%, dropping the effective rate to 0.6%.9Internal Revenue Service. Topic No. 756, Employment Taxes for Household Employees On $7,000 that’s $42 for the year. FUTA is entirely the employer’s cost. Never withhold it from your employee’s pay.
State Unemployment and Workers’ Compensation
Your state almost certainly collects its own unemployment insurance contributions on household wages. New employer rates typically land somewhere between 1% and over 5%, and your state’s workforce or labor agency assigns your rate once you register.
Some states also require household employers to carry workers’ compensation insurance, which pays medical bills and lost wages if your housekeeper is injured on the job. Even where coverage is optional, a policy protects you from personal liability. Your state’s labor department or workers’ compensation board can tell you what applies.
Minimum Wage, Overtime, and Records
Household employees are covered by the Fair Labor Standards Act. You owe at least the federal minimum wage of $7.25 per hour, and many states and cities set higher floors. If your housekeeper works more than 40 hours in a week, you owe overtime at one and a half times their regular rate.
Keep records for each employee showing full name, Social Security number, address, total hours worked each week, total cash wages paid each week, and any amount claimed for room or board. Hold those records at least three years.10eCFR. 29 CFR 552.110 – Recordkeeping Requirements The IRS separately requires you to keep employment tax records for at least four years after filing.11Internal Revenue Service. Employment Tax Recordkeeping
One boundary worth knowing: live-in domestic workers are exempt from federal overtime pay, though they still get at least minimum wage for every hour worked.12eCFR. 29 CFR 552.102 – Live-In Domestic Service Employees If your housekeeper lives in your home, the hour-tracking and credit-for-lodging rules are different from the ones above, and worth researching separately.
Filing and Paying at Year’s End
Household employment taxes are reported once a year, not quarterly like a business. You attach Schedule H (Household Employment Taxes) to your personal Form 1040. Schedule H calculates your combined Social Security, Medicare, and FUTA for the year.13Internal Revenue Service. 2025 Schedule H (Form 1040) Household Employment Taxes
Give Your Housekeeper a W-2
The standard deadline to give your employee their W-2 and file Copy A (along with Form W-3) with the Social Security Administration is January 31.14Social Security Administration. Deadline Dates to File W-2s For the 2026 tax year, January 31, 2027 falls on a Sunday, so the deadline shifts to February 1, 2027.15Internal Revenue Service. 2026 General Instructions for Forms W-2 and W-3 If you file electronically through the SSA’s W-2 Online service, the W-3 data is generated from your W-2 submission, so you don’t file a separate W-3.5Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide
Don’t Let the April Bill Surprise You
Because household employment taxes land once a year, people who ignore them until April can face a nasty total. Two ways to spread the pain:
- If you have a salaried job, file a new W-4 with your own employer to increase the federal income tax withheld from your paycheck. The extra withholding offsets the household taxes you’ll owe in April.
- Make quarterly estimated payments with Form 1040-ES. You can pay through IRS Direct Pay (free, no account needed) or your IRS Online Account.16Internal Revenue Service. Estimated Taxes
Adjusting your salary withholding is simpler if you have a regular paycheck. Estimated payments make more sense if you’re self-employed or retired.
What Happens If You Don’t Comply
Ignoring household employment taxes doesn’t make them disappear; it makes the eventual bill larger with penalties on top.
If you treat your housekeeper as an independent contractor when they’re actually an employee, you can be held liable for every employment tax that should have been paid, including the employee’s share of FICA that was never withheld. The IRS can also assess penalties under Section 3509, which adds a percentage of wages on top of the back taxes, with higher penalty rates if you never filed the required information returns.1Internal Revenue Service. Independent Contractor (Self-Employed) or Employee?
Late filing and late payment carry their own stacking penalties:
- Failure to file: 5% of the unpaid tax per month, capped at 25%. If a return is more than 60 days late, the minimum penalty is $525 or 100% of the tax owed, whichever is less.
- Failure to pay: 0.5% of the unpaid tax per month, capped at 25%.
- Interest accrues daily on any unpaid balance at the federal short-term rate plus 3%.
These penalties apply per form, so a late W-2 carries its own penalty on top of a late Schedule H.17Internal Revenue Service. Topic No. 653, IRS Notices and Bills, Penalties and Interest Charges Separate from the IRS, failing to carry required workers’ compensation or pay state unemployment taxes can bring state fines and personal liability for your employee’s injury costs. The state exposure can hurt as much as the federal piece.