What is the method of computation of federal household employee taxes ?
Prashant Thakur Changed status to publish November 10, 2022
You need to withhold Social security, medicare taxes and in some cases unemployment cases for household employees if following conditions are fulfilled
- Minimum wages is $2,600 in tax year 20600 ( In tax year 2022 , minimum wage subject to employment tax was $2,400)
- Maximum wages is $160,000 in tax year 20600 ( In tax year 2022 ,maximum wage subject to employment tax was $147,000)
How to calculate household employment taxes 2022 ?
Withhold 7.5% of wages given to employee and 7.65% for your self( employer portion.
So, if you paid a nanny for your child $500 per week for two months during tax year 2022 .Since the payment to your household employee was more than minimum wages for social security tax of $2,400, you must deduct the tax 15.30 % (7.65% for employee and 7.65% for yourself as employer ) on weekly wages and deposit the tax wih IRS .
You can test this household employment tax calculator.
Prashant Thakur Changed status to publish November 10, 2022
