California Tax Service Center

Household Employers


Who is a Household Employer?

If you pay wages to people who work in or around your home, you may be considered a household employer. Refer to the table below for a list of workers and whether they are or are not considered household employees. A household employee may perform services on a temporary or less than full-time basis.

*These Are Household Employees
*These Are Not Household Employees
  • Baby-Sitters
  • Butlers
  • Caretakers
  • Chauffeurs
  • Cooks
  • Crews of Private Yachts
  • Gardeners
  • Governesses/Governors
  • Home Health Care Workers
  • Housekeepers
  • Janitors
  • Laundry Workers
  • Maids
  • Pilots of Private Airplanes for Family Use
  • Pool Maintenance Persons
  • Valets
  • Waiters/Waitresses
  • Carpenters
  • Electricians
  • Librarians
  • Musicians
  • Nurses Leased From a Nursing Registry
  • Painters
  • Plumbers
  • Private Secretaries
  • Tutors
  • Workers Leased From an Employee Leasing Service
  • Workers Provided by Independent Businesses (for example: a janitorial service, catering service, gardening service, or pool maintenance service)

*This list is not intended to be a complete list of household employees.

When Does a Household Employer Become Subject to State Payroll Taxes and Must Register With the EDD?

A household employer must report when he/she employs one or more individuals to perform work and pays cash wages of $750 or more in a calendar quarter. You must register with the Employment Development Department (EDD) by submitting a Registration Form for Employers of Household Workers (DE1 HW) within 15 days after you pay $750 in total cash wages. Register online using e-Services for Business.

What Payroll Taxes Do Household Employers Pay?

The amount of wages you pay in a calendar quarter will determine the payroll taxes you are required to withhold and pay.

If You Pay (in a Quarter)
Then
$750 to $999.99*
Withhold State Disability Insurance (SDI).
$1,000 or more**
Withhold SDI. In addition, pay Unemployment Insurance (UI) and Employment Training Tax (ETT).

*If wages fall below $750 in a following quarter, you must continue to withhold SDI from your employees’ wages through the remainder of the current year and through the following calendar year.

**If wages fall below $1,000 in a following quarter, you must continue to withhold SDI from your employees’ wages and pay UI and ETT through the remainder of the current year and through the following calendar year.

Cash wages include both checks and cash. Do not include noncash wages, such as meals and lodging, when calculating whether you have reached $750 in cash wages.

The following examples will help you decide when you must register with the EDD, begin reporting employee wages and withholdings, and paying payroll taxes:

Cash Wages
Meals & Lodging
Am I Required to Register?
$700
$149
You are not required to register, report employee wages, or withhold/pay any California payroll taxes because the cash wage limit of $750 in a quarter has not been met (the value of meals and lodging is not included in reaching the $750 cash wage limit).
$750
$75
You must register, report employee wages, and withhold SDI on the entire $825. You are not required to pay UI and ETT because the cash wage limit of $1,000 in a quarter has not been met.
$900
$150
You must register, report employee wages, and withhold SDI on the entire $1,050. You are not required to pay UI and ETT because the cash wage limit of $1,000 in a quarter has not been met (the value of meals and lodging is not included in reaching the $1,000 cash wage limit).
$1,000
$100
You must register, report employee wages, and pay UI and ETT and withhold SDI on the entire $1,100

Household employers are not required to withhold Personal Income Tax (PIT); however, they are required to report PIT wages for each household employee. If a household employee wishes to have PIT withheld from his or her wages and you agree to withhold it, you need to report and send the PIT withheld to the EDD. The California Withholding Schedules are available online.

What Are Wages?

Wages are all compensation for an employee?s personal services, whether paid by check or cash, or the reasonable cash value of noncash payments such as meals and lodging. The method of payment, whether by private agreement, consent, or mandate, does not change the taxability of wages paid to employees. Payments are considered wages even if the employee is: a casual worker, a day or contract laborer, part-time or temporary worker, or paid by the day, hour, or any other method or measurement. Supplemental payments, including bonuses, overtime pay, sales awards, commissions, and vacation pay are also considered wages.

Important: If you pay your employee?s share of Social Security, Medicare, and/or State Disability Insurance (SDI) without deducting the amounts from their wages, these payments may also be wages. For more information, refer to Information Sheet: Social Security/Medicare/SDI Taxes Paid by an Employer (DE 231Q).

Terms to Know:

Two Types of Household Employers:

  • Annual
  • Quarterly

The following table explains the requirements for filing payroll tax reports and making tax payments for each type:

 
Annual Household Employer
Quarterly Household Employer
Requirements
Reports wages quarterly and pays taxes annually.
Reports wages quarterly and pays taxes quarterly.
Annual Wage Threshold
Pays household wages of $20,000 or less annually and elects to be an annual Household Employer.
Pays household wages that exceed $20,000 annually.
or
Pays household wages of $20,000 or less annually and does not elect to be an annual Household Employer.
Forms Required:
Registration
Each Quarter
Each Year

How to Complete the Required Filing Forms

Quarterly Household Employers

Quarterly household employers will file the Quarterly Contribution Return and Report of Wages (DE 9) and Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C) each quarter and submit deposits using the Payroll Tax Deposit (DE 88) coupon. For additional information about filing these forms and electronic filing options, visit the EDD?s Required Filings and Due Dates Web page.

Annual Household Employers

Annual household employers are required to file an Employer of Household Worker(s) Quarterly Report of Wages and Withholding (DE 3BHW) each quarter and an Employer of Household Worker(s) Annual Payroll Tax Return (DE 3HW) annually.

DE 3BHW

The DE 3BHW is used to report employee quarterly wages subject to Unemployment Insurance (UI), Employment Training Tax (ETT), State Disability Insurance (SDI) taxes, and Personal Income Tax (PIT) wages. If PIT is withheld, that amount is also reported on this form. Even though taxes are paid just once a year, wages must be reported each quarter by state law. For any quarter that you do not have wages, you must still file the report.

Quarter Reporting Format for Forms and Deposits

Many EDD forms require you to specify the quarter on the report and/or deposit. The date format used on forms for reporting and/or making deposits is the last 2 digits of the year and then one digit representing each quarter. Entering the incorrect format may cause delays, penalties, interest, and/or misapplication of funds.

For example:

  • 1st quarter of 2013 is entered as 131, which is 13 for 2013 and 1 for the first quarter.
  • Subsequent quarters would be 132, 133, and 134.

Electronic Filing

You can file and pay online using e-Services for Business. It?s fast easy and secure.

Paper Filing

Employment Development Department
PO Box 826221 MIC 28B
Sacramento CA 94230-6221

Timeliness of Forms

Electronic forms determine their timeliness by the date they are completed and transmitted; paper forms are determined by their postmark date. When the due date falls on a Saturday, Sunday, or legal holiday, the next business day is considered to be the last timely date.

Penalty and interest will be charged on late reports.

The 3BHW is due as follows
Report Covering
Filing Due Dates
Delinquent if Not Filed By
January, February, March
April 1
April 30, 2013
April, May, June
July 1
July 31, 2013
July, August, September
October 1
October 31, 2013
October, November, December
January 1
January 31, 2014

If you paid no wages during a quarter, you are still considered an employer and required by law to sign and file the DE 3BHW. Check the ?No Payroll? box in Item B, sign and mail the report. If you do not expect to pay wages within the next year, please complete a Change of Employer Account Information (DE 24).

For additional information:

DE 3HW

The DE 3HW is used by household employers who elect to pay taxes annually. The DE 3HW is used to send UI, ETT, and SDI withheld to the EDD. If Personal Income Tax (PIT) is withheld, that amount is also sent to the EDD with this form. If your total accumulated wages exceed $20,000 during the year, you must notify the EDD immediately that you need to change to a quarterly household employer.

Electronic Filing

You can file and pay online using e-Services for Business. It?s fast easy and secure.

Paper Filing

Employment Development Department
PO Box 826221 MIC 28B
Sacramento CA 94230-6221

Timeliness of Forms

Electronic forms determine their timeliness by the date they are completed and transmitted; paper forms are determined by their postmark date. When the due date falls on a Saturday, Sunday, or legal holiday, the next business day is considered to be the last timely date.

Penalty and interest will be charged on late reports.

The 3HW is due as follows:
Report Covering
Filing Due Dates
Delinquent if Not Filed By
2013
January 1, 2014
January 31, 2014

For additional information:

Household Employers can obtain more information on reporting requirements from the following publications:

Additional information is also available through the EDD no-fee payroll tax seminars, or by calling the Taxpayer Assistance Center at 1-888-745-3886.