Difference Between Gross and Net Wages
Gross pay is the pay before tax withholdings and other benefit deductions. Net pay is the take-home amount.
What Kind of Taxes Does a Caregiver Need to Pay
California’s caregivers have to pay Social Security and Medicare (FICA), payroll taxes, and California state disability insurance taxes.
Which Taxes Am I as Employer Responsible For?
The employer must pay all withholdings of Social Security, Medicare and California state disability insurance taxes, plus the employer’s portion of Social Security and Medicare.
The employer must also pay the Federal (FUTA) and California (SUTA) unemployment insurance taxes and the California Employment Training Tax.
Can I Place My Household Employee on My Company’s Payroll?
The IRS does not want you to place you household employers on your company’s payroll, if only because the filings are different for each.
How often are the withheld taxes remitted to state and federal authorities?
Household employers have to file tax forms with the California Employment Development Department (EDD) on a quarterly basis, and with the IRS in April, June, September, and January. Employers have to list and remit with these forms all employee tax withholdings as well as the employer’s accrued taxes. The EDD requires employers to remit on a monthly rather than quarterly basis employee taxes withheld that exceed $350 per quarter.
What Happens at the End of the Year?
Household employers have to prepare and distribute Form W-2 to each employee at the end of the year, file Schedule H with the employer’s personal income tax return, and file Form W-2 Copy A and Form W-3 with the Social Security Administration.
How Do I Get My EIN?
Household employers must obtain a Federal “Employer Identification Number” (EIN) that registers you as an employer. This is similar to your social security number and can be obtained from the Economic Development Department (EDD).
Why Do I Have to Give a POA?
California’s Economic Development Department (EDD) requires to have a Power of Attorney (POA) Declaration (DE 48) signed by a household employer that enables a processing third party (agent) to represent the employer.