Domestic Employees and Nanny Taxes

It’s a topic we get asked about a lot, and yes, if you guide them on the work that you want done and HOW you want it done, then you do need to pay domestic workers as employees.

It will bring you peace of mind that you’re in compliance, avoiding penalties – and you’ll attract top-level candidates for the job.

If you have to file to become an Employer, it’s easier than you think.
We’re here to help answer any questions along the way.

Click HERE to find out if your worker is an employee or an independent contractor.

What is a domestic employee?

Household employees and domestic workers can include:

  • Nannies and Babysitters
  • Cleaners
  • Housekeepers
  • Caretakers
  • Gardeners and Landscapers

When you hire Domestic Services staff to help manage your home or care for a dependent, this means you must comply with State and Federal employment rules.

When you pay wages to any of these household support workers, and that amount exceeds a certain amount in a calendar year, you will need to provide your staff with proper pay-stubs, as well as withhold the required tax withholdings.

The year-to-year amount can change based on IRS guidelines. In 2020 that amount was $2,200 (or more than $1000 in any quarter). In 2021 the amount is $2,300.00 (or more than $1000 in any quarter).

To learn more about overtime and caregivers, please check out the resources provided by here.

Who is NOT a household employee?

Plumbers, contractors, electricians and the like who provide their services as independent contractors, are not considered employees no matter how often you use them.

If you’re wondering about an in-home tutor or teacher and California’s AB5, we encourage you to visit this article by National Law Review. Stay tuned to this page if California makes any changes for classifying tutors and teachers during the Coronavirus Pandemic.

How We Can Help

nanny taxes

  • Pacific Payroll Group can be your household employee payroll service for a low monthly fee. Including all the admin tasks involved – payroll tax deductions, tax reports & filings, W2s, direct deposit, online access, and more.
  • You don’t have to process your own payroll or calculate tax deductions, worrying about when certain taxes are due, or having to prepare and file quarterly reports to the IRS and State (which have certain filing requirements that have to be met).
  • Pacific Payroll Group handles all of that for you, we remove the complexity.
  • It’s way easier and more affordable than you might think. Simply request a free quote based on your own, unique situation.

Why Choose Pacific Payroll Group?

Whether it’s a big company with lots of employees or a husband and wife or self-employed individual, we’re always happy to help.

We have dedicated payroll specialists in-office to work with you, to customize solutions for your particular set up.

Alternatively, if you have changes or questions, we’re just a quick call or email away.

  • We handle payroll in any State.
  • Caring, attentive, expert support.
  • Prompt, professional responses, every time.
  • We automate the process.
  • If you don’t have many changes, you’ll never even have to think about payroll.
  • Dedicated, competent payroll specialists.
  • Responding to your needs quickly.
  • We cater to you.
  • No contracts.
  • Low monthly fee.
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