Household Employees in 2026 – Federal Payroll and California Registration

Hiring someone to work in a private home can create payroll obligations at two levels of government, each with its own threshold and its own measurement period. The federal rules turn on annual and quarterly cash wage figures reported through Schedule H. California applies a separate quarterly test administered by the Employment Development Department.

This educational publication explains how the classification question is framed and how the two sets of thresholds are structured for 2026. It does not determine whether a particular worker is an employee, and it does not calculate any household employer’s tax or registration obligation.

1. Who Is a Household Employee

The federal test looks at the working relationship rather than the job title or the payment method. IRS Publication 926 frames it around control: a worker is a household employee when the person who hired them controls what work is done and how it is done. The fact that the work is part-time, paid in cash or arranged informally does not change the analysis.

The counterpart is equally direct. As the publication puts it, “If only the worker can control how the work is done, the worker isn’t your employee.” A worker who sets their own methods, supplies their own tools and offers services to the public generally falls outside household employment.

The setting also matters. Publication 926 notes that services such as those of a private secretary, tutor or librarian are not household work even when performed inside the home. Those arrangements are analysed under other rules.

2. Workers Whose Wages Are Not Counted

Even where an employment relationship exists, certain wages are excluded from the federal calculations. Publication 926 excludes wages paid to a spouse, to a child under 21 and to a parent, though it describes a specific exception for a parent who cares for a child.

Workers under 18 are also excluded unless household work is the employee’s principal occupation. The publication notes that a student’s household work generally is not their principal occupation, which removes many part-time arrangements from the count without removing the employment relationship itself.

These exclusions reduce the wages used to test the thresholds. They are not statements that no records are needed, and they do not carry over automatically to the California analysis described below.

3. The 2026 Federal Thresholds

Two separate federal figures apply, and they are measured over different periods. Social security and Medicare taxes apply when a household employer pays cash wages of $3,000 or more to a household employee during 2026. Federal unemployment tax applies when total cash wages to all household employees reach $1,000 or more in any calendar quarter of 2025 or 2026.

Because the FUTA test is quarterly and aggregated across all household employees, a household can meet it in a single busy quarter without reaching the annual social security and Medicare figure for any one worker.

Federal income tax withholding sits outside both tests. Publication 926 is explicit: “You’re not required to withhold federal income tax from wages you pay a household employee.” Withholding is appropriate only where the employee asks and the employer agrees, in which case the employee provides a completed Form W-4.

Household employment taxes are reported on Schedule H, filed with the 2026 federal income tax return by April 15, 2027. A household employer who is not otherwise required to file a return can file Schedule H by itself, and an extension of time to file the return also extends Schedule H. Copies B, C and 2 of Form W-2 go to the employee by February 1, 2027, with Copy A and Form W-3 filed with the Social Security Administration by the same date.

4. California Registration and the EDD Wage Tests

California applies its own thresholds through the Employment Development Department, and they do not match the federal figures. Form DE 1HW requires registration within 15 days after hiring one or more domestic household employees and paying wages in excess of $750 in a calendar quarter.

Which California taxes apply depends on where the quarterly wages land. State Disability Insurance, which includes the Paid Family Leave component, applies to cash wages over $750 but not more than $999.99 in a quarter. Unemployment Insurance, the Employment Training Tax and SDI all apply once cash wages reach $1,000 or more in a quarter.

California personal income tax withholding works much like its federal counterpart: it is not mandatory for household employment. The DE 1HW states that both the household worker and the household employer must agree before PIT is withheld from the worker’s wages.

A hypothetical Los Angeles household pays a part-time housekeeper $900 in one quarter and nothing in the others. The annual figure stays well below the federal social security and Medicare threshold, and the quarterly figure stays below the federal unemployment threshold. The California registration threshold and the SDI band are nevertheless in view, because both are measured on a quarterly basis against a lower amount.

5. What the Thresholds Do Not Decide

Crossing a threshold starts a reporting obligation; it does not establish classification. A worker who is genuinely self-employed does not become a household employee because the payments were large, and a household employee does not become a contractor because the payments were small.

Nor do these rules address wage-and-hour obligations, workers’ compensation coverage or employment eligibility verification. Those are separate requirements with their own authorities, and payroll tax registration does not satisfy them.

Timing interacts with the rest of the return. Household employment taxes reported on Schedule H can affect the amount a household needs to pay during the year, a subject covered in Quarterly Estimated Taxes 2026 and, for the state side, in California Estimated Tax Payments 2026. The federal filing framework and its extensions appear in Tax Extensions 2026.

Where federal and California answers diverge, the divergence is the point rather than an error to reconcile. This publication describes the structure of both tests and does not determine either obligation for any particular household.

Compliance Resources and Tools

• Internal Revenue Service — Publication 926, Household Employer’s Tax Guide (2026) (accessed November 4, 2026).
• Internal Revenue Service — About Schedule H (Form 1040), Household Employment Taxes (accessed November 4, 2026).
• California Employment Development Department — Form DE 1HW, Employers of Household Workers Registration and Update Form (accessed November 4, 2026).
• California Employment Development Department — Household Employer resources (accessed November 4, 2026).