Do you or have you ever come across a household employer? Do you have a good sense as to what the Internal Revenue Service definition of a household employer is? A household employer is going to be an individual that will pay someone else to perform duties in or around their home. A perfect example of a household employer would be someone that hires someone else to cut the lawn or clean the inside of the home. Personal assistants, cooks, as well as household managers, are also under the category of a household employer and household employee relationship.
When you pay a household employee a certain amount of money, more than what the Internal Revenue Service sees as material, you need to be thinking about employment laws at the local, state, and federal level. The common name for this is what is known as a nanny tax obligation. If an annual pay goes over $2,000, then the household employer must pay Social Security, Medicare, as well as Federal Unemployment Tax.