To pay a personal assistant correctly, treat the person as your household employee: get an employer ID number, collect hiring paperwork before the first shift, withhold Social Security and Medicare taxes once you pay $3,000 or more in a calendar year, pay your matching share plus federal unemployment tax, and report it all once a year on Schedule H with your Form 1040.1Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide The rules look intimidating from a distance, but the moving parts are few and the deadlines are predictable once you know what to look for.
Employee or Independent Contractor
Almost every personal assistant is a household employee, not a contractor. The IRS applies a common-law test that looks at behavioral control, financial control, and the nature of the relationship.2Internal Revenue Service. Employee (Common-Law Employee) If you decide when the assistant works, what they prioritize, and how the job gets done, that person is your employee. An assistant who works only for you, uses your supplies, and gets reimbursed for expenses fits the employee category squarely.
A true independent contractor sets their own schedule, serves multiple clients, and can profit or lose money based on their own business decisions. Most personal assistants fail every prong of that test. Labeling someone a “1099 contractor” on paper does not change the legal reality, and misclassification makes you liable for all unpaid employment taxes plus penalties.3Internal Revenue Service. Independent Contractor (Self-Employed) or Employee? When in doubt, treat the assistant as an employee.
Paperwork Before the First Paycheck
A handful of documents need to be in place before any money changes hands.
- Apply for an Employer Identification Number using Form SS-4. You can do it online, by fax, or by mail. The EIN is your tax ID for reporting employment taxes and filing Schedule H.4Internal Revenue Service. Instructions for Form SS-4 (Rev. December 2025)
- Have the assistant complete Form I-9 to verify work authorization. The employee fills out Section 1 on their first day, and you complete Section 2 within three business days of the hire date after reviewing identity documents such as a passport, driver’s license, or Social Security card.5U.S. Citizenship and Immigration Services. 2.0 Who Must Complete Form I-9
- Have the assistant fill out Form W-4. Federal income tax withholding is technically optional for household employees, but withholding saves the assistant from a large bill at tax time.6Internal Revenue Service. About Form W-4, Employee’s Withholding Certificate
- Collect the assistant’s Social Security number and bank routing information for direct deposit.
Register with your state’s tax and unemployment agencies at the same time. State registration is what earns you the FUTA credit described below, and it usually needs to happen before your first payroll date.
Setting the Rate and Handling Overtime
Most personal assistants are non-exempt under the Fair Labor Standards Act. They must earn at least the federal minimum wage of $7.25 per hour, and they must receive overtime at 1.5 times their regular rate for hours over 40 in a single workweek. Many states set higher minimums; pay whichever is greater. At $22 per hour, each overtime hour costs $33.
A personal assistant could theoretically qualify as exempt under the FLSA’s administrative exemption, but the bar is high: at least $1,128 per week on salary and work involving independent judgment on significant business matters.7eCFR. Part 541 – Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Computer and Outside Sales Employees Scheduling appointments, running errands, and managing a household calendar rarely meet that duties test. When in doubt, pay overtime.
Live-In Assistants
Federal law exempts domestic workers who actually live in the household from overtime. A live-in assistant is still entitled to minimum wage for every hour worked but does not have to receive time-and-a-half beyond 40 hours.8eCFR. 29 CFR 552.102 – Live-In Domestic Service Employees The employer and assistant can agree in writing to exclude bona fide sleeping periods, meal times, and blocks of free time from paid hours, but any interruption by a call to duty counts as work time.
What to Withhold, and What You Owe on Top
The $3,000 threshold is the trigger. In 2026, Social Security and Medicare taxes kick in only once you pay a single household employee $3,000 or more in cash wages during the calendar year.1Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide Once you cross that line, every dollar of cash wages you paid that employee in the year becomes subject to FICA, not just the amount above $3,000. The threshold is per employee, so paying one assistant $4,000 and a part-time helper $1,500 means FICA applies only to the first assistant’s wages.
FICA is 6.2% Social Security and 1.45% Medicare, deducted from the employee’s gross pay for a combined 7.65% withholding.9Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates On $1,000 of gross pay, that is $76.50 withheld. Social Security withholding stops once the assistant’s wages reach $184,500 for the year; Medicare has no cap.1Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide
You then owe the same 7.65% out of your own pocket as the employer’s match, bringing the total FICA cost on that $1,000 paycheck to $153.10Social Security Administration. Social Security and Medicare Tax Rates Half comes from the assistant’s gross pay; half is yours to add.
Calculate each paycheck by multiplying total hours worked (including overtime at 1.5x) by the hourly rate to get gross wages. Subtract the employee’s share of FICA and any income tax withholding to get net pay. Keep a pay stub or payroll record for every pay period showing gross wages, each deduction, and net pay.
Federal Unemployment Tax
You owe FUTA if you paid $1,000 or more in total cash wages to all household employees in any calendar quarter of 2025 or 2026.1Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide FUTA applies only to the first $7,000 you pay each employee. The statutory rate is 6.0%, but employers who pay state unemployment taxes on time get a credit of up to 5.4%, dropping the effective rate to 0.6%. That works out to a maximum of $42 per employee per year.
State Unemployment Tax
Most states also require household employers to pay state unemployment insurance once wages pass a threshold set by the state. Taxable wage bases range from $7,000 to well over $40,000, and new-employer tax rates vary widely. Register with your state’s workforce or unemployment agency early. Paying state unemployment tax on time is what earns you the 5.4% FUTA credit.
Reimbursing Expenses Without Creating Taxable Wages
Personal assistants routinely spend their own money on errands, supplies, and mileage. Whether reimbursements count as taxable wages depends on whether you follow an “accountable plan.” Under an accountable plan, reimbursements stay off the W-2 entirely. Three requirements: the expense must have a business connection to your household, the assistant must substantiate it with receipts or a log within 60 days, and any excess advance must be returned within a reasonable time. Receipts are required for any single expense of $75 or more.
Handing over extra cash labeled “reimbursement” without those steps turns the full amount into taxable wages. You then owe FICA on it, and the assistant owes income tax. A simple expense report system avoids the problem entirely.
Insurance Gaps to Close
Two coverage gaps catch household employers by surprise. If your assistant drives your car or their own car on your errands, your standard auto policy may not cover accidents during work use. Add the assistant as an authorized driver, and consider a non-owned auto endorsement or umbrella policy if they drive their own vehicle for your tasks.
Second, many states require workers’ compensation insurance for household employees who work above a set number of hours per week. Thresholds vary — some states require coverage at 40 or more hours per week, others trigger at lower hours or at just one employee. Homeowner’s policies usually do not include a workers’ compensation rider that covers domestic workers, so a separate policy is typically necessary. Check your state’s workers’ compensation board for the rules that apply.
Filing at Year End
Household payroll diverges from business payroll here. Most household employers do not file quarterly Form 941 returns. You report all household employment taxes once a year on Schedule H, attached to your personal Form 1040.1Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide Schedule H rolls Social Security, Medicare, FUTA, and any withheld federal income tax into one calculation. File it with your 2026 return by April 15, 2027. A filing extension for your return covers Schedule H too.
The exception: if you already own a business that files Form 941 or Form 944, you can include your household employee’s taxes on those business returns instead. Otherwise, use Schedule H.
Because you are paying employment taxes annually rather than quarterly, plan to increase your own estimated tax payments or ask your own employer to withhold extra during the year. Estimated tax payments for 2026 are due April 15, June 15, and September 15 of 2026, and January 15, 2027.1Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide Underpaying can result in a penalty when you file.
W-2 Deadlines and Penalties
By January 31 following the tax year, you must give your assistant a Form W-2 showing total wages and taxes withheld, and file Copy A with the Social Security Administration by the same date.11Internal Revenue Service. Employment Tax Due Dates For the 2026 tax year the deadline shifts to February 1, 2027, because January 31 falls on a Sunday.12Internal Revenue Service. General Instructions for Forms W-2 and W-3 (2026)
Missing the deadline triggers per-form penalties. For returns due in 2026, the penalty is $60 per form up to 30 days late, $130 per form between 31 days late and August 1, and $340 per form after August 1 or if you never file.13Internal Revenue Service. Information Return Penalties Each form counts separately, so missing both the employee’s copy and the SSA copy compounds fast. Intentional disregard doubles the penalty to $680 per form with no cap.
When the Job Ends
Federal law does not require you to hand over the final paycheck immediately when the assistant quits or you terminate them.14U.S. Department of Labor. Last Paycheck Several states, however, require same-day or next-day payment after a termination, and the penalties for missing those state deadlines can be steep. Pay all wages owed through the last day worked, plus any accrued but unused paid time off if your agreement provides for it.
After the final paycheck, your remaining obligations are the W-2 (due by January 31 of the following year) and Schedule H when you file your return. If the assistant crossed the $3,000 mark during the year, FICA is owed regardless of whether the job lasted twelve months or two. Keep your payroll records for at least four years in case of an audit.