Taxes to be Paid by Household Employers. Household employers can expect to PAY employer payroll taxes of approximately 9-11% of their employee’s gross wages (Good News! Tax breaks can save you as much or more than the taxes). Specifically, the employer taxes are:

• The employer’s half of Social Security & Medicare (“FICA”). The rate is 7.65% of employee’s gross wages.

• State Unemployment Tax Assessment (“SUTA”). The rate varies by state.

• Federal Unemployment Tax Assessment (“FUTA”). The rate is 0.6% of first $7,000 of employee’s gross wages and, therefore, caps at $42/year.

• Other state taxes (many states have a small additional tax in order to fund initiatives such as workforce development/training)

These taxes must be reported and remitted to the IRS and the state on a quarterly basis.

For an estimate of your employer tax costs and your employer tax breaks, call us or use our free Employer Budget Calculator. 

Taxes to be Withheld by Household Employers. Household employers are required to WITHHOLD taxes from their employee’s paycheck. Specifically, those taxes are:

• The employee’s half of FICA (7.65% of gross wages). In 2012, employee FICA taxes are reduced to 5.65%.

• Federal Income Tax (withholding rate based on employee elections on Form W-4)

• State Income Tax (withholding rate based on employee elections on state Form W-4)

• Other state taxes (some states levy additional taxes to pay for things like Disability Insurance)

These taxes must be reported and remitted to the IRS and the state on a quarterly basis.

For an estimate of your employee’s take-home pay, give us a quick call or use our free Employee Paycheck Calculator.