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When you hire a nanny, either temporarily or on a permanent
basis, she is always your employee. She is not an independent contractor. This is
determined by the nature of work she performs, not by the amount of money she is
paid or the amount of time she works for you.
If you pay a household employee less than $1,500 in a
calendar year, you are not required to withhold any taxes from
her salary, nor do you have any tax reporting responsibilities as an
employer.
When you pay a household employee more than $1,500 in a
calendar year to perform childcare duties in or around your home, you must
follow the tax withholding and reporting requirements at the state and federal
level. Your household employment taxes will be approximately 10% - 12% of your
employee's gross earnings. These taxes are in addition to your employee's salary.
Here is how they break down:
- Social Security
- Medicare
- Federal Unemployment Insurance
- Oregon Unemployment Insurance
- Oregon Special Payroll Tax
Your local IRS and State Department of Revenue offices can provide
all of the forms you need to get started as a household employee.
For further information
please contact a household employment tax authority, Breedlove & Associates
or GTM & Associates.
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