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nanny tax

A nanny tax—also known as a household-employment tax—is not a legal term, but refers to a federal social security tax imposed on the employer of a domestic employee (such as a nanny) if the employer pays the employee more than a specified amount in total wages in a year.

In Hawaii, as in all states, the 'nanny tax' refers to federal tax obligations that apply to household employers. If a household employer in Hawaii pays a nanny or other domestic employee $2,400 or more in cash wages in 2023, they are responsible for withholding and paying Social Security and Medicare taxes. These are collectively known as FICA taxes. The employer and employee each pay 7.65% for a total of 15.3%. If the employer pays $1,000 or more in a calendar quarter, they also need to pay federal unemployment tax (FUTA). Additionally, Hawaii requires employers to pay state unemployment insurance (SUI) if they pay $1,000 or more in wages in a calendar quarter. Employers may also need to withhold state income tax and ensure compliance with any other relevant state labor laws. It's important for employers to keep accurate records of all payments and taxes, as they will need to report this information to the IRS and the state of Hawaii.

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Taxes

nanny tax

Individual & Family Legal Plan

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Hawaii State Code

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Taxes

nanny tax

Hawaii State Code