What It Means
A household employee is someone you pay to work in or around your home when you have the right to control what the work is and how it gets done. The IRS counts babysitters, nannies, housekeepers, maids, cooks, drivers, caretakers, health aides, private nurses and yard workers among household workers, and any of them is your employee when that control sits with you. What matters is having the right to direct the details, even if you rarely use it. Plumbers, repair people and other business owners who sell you their services as independent contractors aren't your employees.
Try It: Is This Worker Your Household Employee?
Pick the situation closest to yours and put in the cash you expect to pay this worker in 2026. Based on IRS Publication 926.
Yes, very likely
Generally not yours
No, an independent contractor
Can be, with a tax exception
The same 7.65% is withheld from the worker's pay.
Under the $3,000 line for 2026, so these wages carry no social security or Medicare tax. FUTA can still apply if you paid household employees $1,000 or more in a quarter.
The IRS says a sitter caring for your child in their own home, or a worker an agency directs, generally isn't your employee.
You don't withhold or pay employment taxes on what you pay an independent contractor.
Wages to your spouse, your child under 21 and, generally, your parent aren't subject to social security and Medicare tax, and they aren't counted for FUTA.
A worker under 18 at any point in the year whose main occupation isn't household work, such as a student, is exempt from social security and Medicare tax.
How People Say It at Work
- "Is our cleaner technically our employee?"
- "We hired her directly, so we're the employer."
- "The sitter comes through an agency, so that's on them."
The Breakdown
Worked example: one family's helpers in 2026
| Worker | Paid in 2026 | Household employee? | Social security and Medicare? |
|---|---|---|---|
| Housekeeper paid $150 every two weeks to clean from the family's list | $3,900 | Yes | Yes, it's over $3,000 |
| Weekend sitter, age 16, a high school student | $3,200 | Yes, when the family directs the work | No, under 18 and a student |
| Lawn crew sent by a landscaping company | $1,800 | No, the company runs the work | No |
What the result means. Only the housekeeper's wages carry social security and Medicare tax: 7.65% from the family, which is $298.35, and the same 7.65% withheld from her pay. The family reports both on Schedule H with its Form 1040, and it needs an employer identification number (EIN) to give her a Form W-2.
Federal unemploymentUnemployment benefitsWeekly payments from a state's unemployment insurance program to eligible workers who lose a job through no fault of their own, with rules set by each state. See more tax (FUTA) is a separate test. The family paid its two household employees more than $1,000 in cash in a single quarter, so FUTA applies to the first $7,000 of each one's 2026 wages. With the full 5.4% credit the rate is 0.6%, which comes to $23.40 for the housekeeper and $19.20 for the sitter.
Good to Know
These rules come from IRS Publication 926 (2026). The $3,000 social security and Medicare line applies for 2026, was $2,800 for 2025, and changes most years, so check the current edition before you pay a new worker. Labor law is a separate question from tax: the Department of Labor's Fact Sheet #79 explains how federal minimum wageMinimum wageThe lowest hourly pay the law allows an employer to pay; the federal minimum is $7.25 an hour, and a higher state or local rate wins where one applies. See more and overtime rules apply to domestic service workers in private homes. Your state can have its own payroll and unemployment rules on top. If a worker's status is unclear, ask a tax professional before the year ends.
FAQ
Is a babysitter a household employee?
A babysitter who works in your home on your terms can be. The IRS lists babysitters among household workers, and the deciding question is whether you control the work and how it's done. A sitter who watches your child in the sitter's own home generally isn't your employee.
Is a house cleaner from a cleaning company my employee?
Generally no. When an agency or company decides who does the job and how, the worker is theirs. A cleaner you hire directly and give instructions to can be your household employee.
Do I owe taxes for every household employee?
Not always. For 2026, social security and Medicare apply once you pay one household employee $3,000 or more in cash, with exceptions for your spouse, your child under 21, generally your parent, and a worker under 18 whose main job isn't household work. FUTA applies once your cash wages to household employees reach $1,000 in any calendar quarter.
Do It in Buhata
Budget and repeating entries
Add each household worker's pay in Budget as a repeating expense, so the year's payments sit in one place when you check them against the $3,000 line.
Open BuhataRelated Terms and Categories
- Nanny tax
The federal employment taxes a family owes when it pays a nanny or other household employee enough cash wages in a year, reported on Schedule H.
- Nanny salary
What a family pays a nanny, usually quoted by the hour or week. Care.com's 2026 report puts the US average at $21.75 an hour for one child.
- Housekeeper salary
The pay a housekeeper earns for cleaning and keeping a home or rooms in order; BLS put the median for maids and housekeeping cleaners at $17.07 an hour in May 2025.
- Minimum wage
The lowest hourly pay the law allows an employer to pay; the federal minimum is $7.25 an hour, and a higher state or local rate wins where one applies.
Sources
IRS, Publication 926 (2026), "Household Employer's Tax Guide"; IRS, "Hiring Household Employees"; IRS, Topic No. 756, "Employment Taxes for Household Employees"; U.S. Department of Labor, Wage and Hour Division, Fact Sheet #79, "Private Homes and Domestic Service Employment"
- www.irs.gov/publications/p926
- www.irs.gov/businesses/small-businesses-self-employed/hiring-household-employees
- www.irs.gov/taxtopics/tc756
- www.dol.gov/agencies/whd/fact-sheets/79-flsa-private-home-domestic-service
Last updated .