Household Employee

A household employee is a worker hired to do household work in or around a private home whose employer can control not only what work is done but how it is done, which makes that worker an employee rather than a self-employed person. The status does not turn on whether the work is full time or part time, on whether the pay is hourly, daily, weekly or by the job, or on whether an agency supplied the name (IRS, Publication 926 (2026)). Where cash wages clear the relevant threshold, an annual one for Social Security and Medicare and a quarterly one for federal unemployment tax, the status puts those taxes on the person who did the hiring, reported on Schedule H (Form 1040) with that person’s own income tax return (IRS, Topic no. 756).

Which Workers the Term Reaches

Household work is work done in or around a home, and the IRS names babysitters, butlers, caretakers, cooks, domestic workers, drivers, health aides, housecleaning workers, housekeepers, maids, nannies, private nurses and yard workers as examples of the people who do it (IRS, Publication 926 (2026)). The list runs across childcare, personal care, cleaning, cooking, driving and grounds work, so what unites it is the setting and the control, not the trade.

The setting is half the test. Those same services are not household work unless they are performed in or around a private home, and a separate and distinct dwelling unit maintained in an apartment house, hotel or other similar establishment counts as a private home (IRS, Publication 926 (2026)).

Work that is not household in nature stays outside the term even when it happens at the house. Services performed as a private secretary, a tutor or a librarian in a home are named as examples of that exclusion (IRS, Publication 926 (2026)).

The Test Is Control Over How, Not Only What

Household workers are employees where the person paying can control not only the work they do but also how they do it (IRS, Topic no. 756). Where only the worker can control how the work is done, that worker is self-employed instead, and the usual signs are that the worker supplies their own tools and offers services to the general public in an independent business (IRS, Publication 926 (2026)). The common law right-of-control test behind that line, and the three categories of evidence the IRS weighs, are set out in independent contractor.

Someone running their own trade does not become a household employee just because the work happens at the house. Repairmen, plumbers, contractors and other business people who provide their services as independent contractors are not household employees (IRS, Topic no. 756).

Two more fact patterns flip the answer even though the work is done for the household. If an agency supplies the worker and controls what work is done and how it is done, the worker is not the household’s employee, and a worker who provides childcare in their own home generally is not the household’s employee either (IRS, Publication 926 (2026)).

The Two Thresholds That Turn the Tax On

They are separate tests, they read different wage figures, and a household can sit under one and over the other.

Social Security and Medicare tax, together the Federal Insurance Contributions Act tax or FICA, applies where cash wages of $3,000 or more are paid to any one household employee in 2026. The employee share is 7.65% and the employer share is another 7.65%, which is 15.3% of cash wages in total (IRS, Publication 926 (2026)).

Cash wages means money, including payment by check or money order. The value of food, lodging, clothing, transit passes and other noncash items is not cash wages, so it neither counts toward the threshold nor becomes Social Security or Medicare wages (IRS, Publication 926 (2026)). The rates themselves and the wage base sitting behind them are worked through in payroll tax and Medicare tax.

Federal unemployment tax, the Federal Unemployment Tax Act tax or FUTA, runs on a different trigger. It applies where total cash wages of $1,000 or more are paid in any calendar quarter of 2025 or 2026 to household employees taken together rather than one at a time, and the tax is 6% of cash wages, with wages above $7,000 a year for each employee not taxed (IRS, Publication 926 (2026)).

The two taxes read the family exclusions differently. For Social Security and Medicare, wages paid to a spouse, to a child under the age of 21 or to a parent are not counted, and neither are wages paid to an employee under the age of 18 at any time in the year unless providing household services is that employee’s principal occupation (IRS, Publication 926 (2026)).

The parent exclusion has an exception that puts those wages back in, and it needs two things at the same time. The parent must be caring for the employer’s child who is under the age of 18 or who has a physical or mental condition requiring an adult’s personal care for at least 4 continuous weeks in the calendar quarter the services were performed. The employer must also be divorced and not remarried, a widow or widower, or living with a spouse whose own physical or mental condition prevents them from caring for that child for at least 4 continuous weeks in that quarter (IRS, Publication 926 (2026)).

Federal unemployment tax reads a shorter list and carries no exception. Wages paid to a spouse, to a child under the age of 21 or to a parent are not FUTA wages, and there is no under-18 rule on that side, so an employee under the age of 18 still generates FUTA wages (IRS, Publication 926 (2026)).

Federal income tax withholding is not part of the package. A household employer is not required to withhold it and should withhold only if the employee asks and the employer agrees, which takes a completed Form W-4 from the employee (IRS, Publication 926 (2026)).

One Household, Two Tests

Say a household pays a housekeeper and a yard worker part time through the year, neither of them a relative, and neither one reaching the cash wage threshold on their own.

CASH WAGES PAID IN 2026
Housekeeper                                        2,400.00
Yard worker                                        1,800.00
Combined                                           4,200.00
Largest single calendar quarter, both workers      1,100.00

FICA TEST, APPLIED TO EACH EMPLOYEE SEPARATELY
Housekeeper against the 3,000 threshold               below
Yard worker against the 3,000 threshold               below
Social security and Medicare wages                     0.00

FUTA TEST, APPLIED TO ALL HOUSEHOLD EMPLOYEES TOGETHER
Quarter total against the 1,000 trigger         at or above
FUTA wages, capped at 7,000 for each worker        4,200.00
FUTA at 6%, before any state unemployment credit     252.00
FUTA at 0.6%, after the full 5.4% state credit        25.20

The two tests read different figures, which is why this household owes no Social Security or Medicare tax and still owes federal unemployment tax, at 6% before the state unemployment credit of up to 5.4% and 0.6% after it. The quarter test also looks backward, since a quarter in either the prior calendar year or the current one turns it on (IRS, Publication 926 (2026)).

The Forms the Employer Picks Up

Form W-2, Wage and Tax Statement, is filed for each household employee paid Social Security and Medicare wages of $3,000 or more, and for any employee from whose pay federal income tax was withheld. Copies B, C and 2 go to the employee and Copy A goes to the Social Security Administration with Form W-3, the transmittal that accompanies it, both by February 1, 2027 for the 2026 year (IRS, Publication 926 (2026)). What each of those boxes counts as its base is in gross wages.

Filing Form W-2 means getting an employer identification number, since the EIN goes on the forms filed for a household employee and is not the same as the employer’s own Social Security number (IRS, Publication 926 (2026)).

Schedule H (Form 1040), Household Employment Taxes, is where the tax itself is reported. It is filed with the 2026 federal income tax return by April 15, 2027, and where the employer is not required to file a return at all it can be filed by itself (IRS, Publication 926 (2026)).

Where This Lands in a Firm’s Work

This is a personal return item rather than a payroll engagement, and that is what makes it awkward. The liability rides on the individual’s Form 1040 through Schedule H, so it tends to surface while a personal return is being prepared rather than during the year, when payroll work would have caught it (IRS, Topic no. 756).

The timing creates a cash problem the return does not fix by itself. Because the household employment tax is paid with the return, a client who paid nothing in during the year can owe an estimated tax underpayment penalty, and the two ways around it are more withholding at the client’s own job or estimated tax payments on Form 1040-ES during the year (IRS, Topic no. 756).

One client type has a second route. A sole proprietor who already files Form 940 and Form 941 or Form 944 for business employees, or Form 943 for farm employees, may report the household employee’s tax on those returns instead of on Schedule H, paying any tax due by the date that form requires (IRS, Topic no. 756).

What It Is Commonly Confused With

A statutory employee is the nearer trap, because both labels attach employee treatment for Social Security and Medicare to a worker the payer may think of as hired help. The two cannot overlap. The statutory category reaches only an individual who is not already an employee under the common law rules, and it is a closed list of four roles: an agent-driver or commission-driver, a full-time life insurance salesman, a home worker who works to the payer’s specifications on materials or goods the payer furnishes and that must be returned, and a traveling or city salesman (26 U.S.C. 3121(d)). Household work is not among them, so a nanny or a housekeeper who meets the control test is a common law employee and never a statutory one. The list and the box 13 mechanics are in statutory employee.

Common Questions

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