Understanding the “Nanny Tax” for your household employees.

Schedule H

If you employ a household employee, such as a maid, nanny, caretaker, yard worker, or driver, you could be subject to paying the “Nanny Tax”. This tax can encompass Social Security and Medicare (collectively known as FICA), FUTA, and SUI (state unemployment insurance tax).

The simplest way to pay these taxes is through filing a Schedule H at the end of the year and filing a quarterly Missouri Unemployment Tax.

Fortunately, you may not be required to pay all of these taxes – whether or not you have to pay these taxes depends on how much your household employee is earning….

If you do not exceed any of the thresholds set by the Federal and State laws, you will not pay any “Nanny Taxes”, and you will not have to file a Schedule H.

Understanding which thresholds you have exceeded can be complicated. The accountants at Hauk Kruse & Associates would like to simplify it for you:

Do I have to pay FICA?

If your employee is not

  • your spouse,
  • your child (under 21 years old),
  • your parent,
  • or under the age of 18

and you pay them more than $1,900 in a year, you DO have to pay FICA.

If you have to pay FICA, you pay a one-time amount at the end of the tax year and you will be responsible for paying a total of 7.65% of your employee’s wages. This includes the 6.2% for Social Security and the 1.45% for Medicare.

You are also responsible for making the payment for your employee’s portion of the FICA. You can do this two ways: by either withholding 7.65% from each of their paychecks or simply by adding it to your balance due on your Schedule H.

Do I have to pay FUTA?

If you employee is not

  • your spouse,
  • your child (under 21 years old),
  • or you parent

and you pay them more than $1,000 in a quarter, you DO have to pay FUTA. Once one quarter passes this threshold, all wages are subject for the entire tax year.

If you have to pay FUTA, you pay a one-time amount at the end of the tax year and you will be responsible for paying 0.6% of up to $7,000 in your household employee’s wages.

Your household employee will not have any withholdings on their paycheck in regards to FUTA.

Do I have to pay the SUI?

If you live in MISSOURI, you become liable for state unemployment when you meet any of the following requirements:

  • you pay your employee $1,000 in cash wages in a calendar quarter
  • you become liable under FUTA
  • you are determined to be a successor to a liable Missouri employer by DES staff

Unlike FICA or FUTA, the Missouri Unemployment Insurance Tax is filed and paid quarterly on MODES-4-7.

If you are required to pay the Missouri Unemployment Insurance Tax, you will pay quarterly and you will be responsible for paying 3.51% of up to $13,000 in your household employee’s wages.

Your household employee will not have any withholdings on their paycheck in regards to the Missouri Unemployment Insurance Tax.

If you live in a state other than Missouri and would like to know if you are required to pay your state’s SUI, please call our office at 314-993-4285.

If you have household employees and would like help filing your tax forms or understanding the “Nanny Tax”, please contact us at 314-993-4285 or at office@hkaglobal.com.


You must file all tax forms using an EIN. If you do not have one, you can apply for one online or we can file for one on your behalf.

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