You've reached the point where running your household is a job in itself. Between managing vendors, coordinating schedules, overseeing other staff, handling household finances, and keeping everything running smoothly—you need a professional.
A household manager (or estate manager, or personal assistant) can transform your daily life. But with salaries ranging from $60,000 to $150,000+, the tax picture is bigger than it is for a weekly housekeeper.
The tax setup is the same as for any household employee—just scaled up.
Who Counts as a Household Manager?
The IRS doesn't have a separate category for "household manager." They use the same household employer rules from IRS Publication 926 that apply to nannies and housekeepers. If someone works in your home (or manages your household affairs) and you control the work, they're your employee.
This includes:
- Household managers — oversee daily operations, coordinate vendors, manage schedules
- Estate managers — manage larger properties, supervise staff, handle budgets
- Personal assistants — handle correspondence, errands, travel planning, appointments
- House managers — maintain the home, manage maintenance, coordinate service providers
- Chiefs of staff — a newer title for the same role in high-net-worth households
- Household couples — two people (often married) who manage a home together
The exception: If you hire a property management company or a staffing agency that directly employs the manager, the company is the employer. But if you hire someone directly—even if a staffing agency found them for you—you're the employer.
The Tax Math at Higher Salaries
Household managers earn significantly more than most domestic workers. That means the tax numbers are bigger, but the percentages are the same.
| Annual Salary | Employer SS + Medicare | FUTA | Est. SUTA | Total Employer Taxes |
|---|---|---|---|---|
| $60,000 | $4,590 | $42 | ~$300 | ~$4,932/year |
| $80,000 | $6,120 | $42 | ~$300 | ~$6,462/year |
| $100,000 | $7,650 | $42 | ~$300 | ~$7,992/year |
| $120,000 | $9,180 | $42 | ~$300 | ~$9,522/year |
| $150,000 | $11,475 | $42 | ~$300 | ~$11,817/year |
SUTA varies significantly by state. These estimates use a mid-range rate on the first $7,000–$12,000 of wages.
Note on Social Security: The 2026 wage base is $184,500. You stop paying the 6.2% Social Security tax (both employer and employee shares) on wages above that amount. Medicare (1.45%) has no cap. If your household manager earns above $200,000, an additional 0.9% Medicare surcharge applies to the employee's share.
Use our household employer calculator to get exact numbers for your state.
Setting Up Payroll
The process is the same as for any household employee, but there are a few things to consider at higher salary levels.
1. Get an EIN
If you don't already have one, apply for free at irs.gov. Takes 5 minutes. Our EIN guide walks through every step.
If you already have an EIN from employing a nanny or housekeeper, you use the same EIN for all household employees.
2. Complete hiring paperwork
- W-4 — Determines federal income tax withholding. At these salary levels, proper W-4 setup matters—under-withholding could leave your employee with a big tax bill in April.
- I-9 — Verifies work eligibility. Required for all employees.
- State forms — Many states have their own withholding certificates. Check your state →
3. Decide on pay structure
Most household managers are salaried, paid biweekly or semi-monthly. A few things to decide:
- Salary vs. hourly — Salaried is standard for managers, but under the Fair Labor Standards Act, domestic workers are generally entitled to overtime pay after 40 hours/week. Some states have exemptions for live-in workers—check your state's rules.
- Benefits — Health insurance, paid time off, retirement contributions, housing allowances. These are negotiated, not required. See our nanny PTO guide for common structures (applies to all household employees).
- Bonuses — Year-end bonuses are taxable wages. Include them in payroll calculations.
4. Run payroll consistently
Each pay period: calculate gross pay, withhold employee taxes (Social Security, Medicare, federal and state income tax), and set aside your employer share. NannyKeeper automates this for $10/month.
5. Make quarterly estimated payments
Due January 15, April 15, June 15, September 15. At higher salary levels, these quarterly payments can be substantial—set aside funds each pay period so you're not scrambling at deadline time. See our quarterly deadline guide.
6. Year-end filing
- W-2 by January 31 — Covers all wages, tips, and taxable benefits. Our W-2 guide has the details.
- Schedule H by April 15 — Filed with your Form 1040. Our Schedule H walkthrough covers every line.
Multiple Household Employees
If you employ a household manager and other staff—a nanny, a housekeeper, a caregiver, a chef—each person is a separate employee with their own W-4, their own withholding, and their own W-2.
But you file one Schedule H that reports all household employees together.
| Detail | Per Employee | Per Household |
|---|---|---|
| EIN | One EIN for all | — |
| W-4 | Each employee | — |
| Payroll | Each employee | — |
| W-2 | Each employee | — |
| Schedule H | — | One combined return |
| FUTA ($7,000 cap) | Per employee | — |
| State unemployment | Per employee | — |
When the manager supervises other staff
If your household manager oversees other workers—a nanny, cleaners, a groundskeeper—those workers are still your employees, not the manager's. The manager works for you, and so do the people they supervise. You're responsible for taxes on everyone.
Live-In Household Managers
Some household managers live on the property. This creates a few additional considerations:
Room and board. If you provide free housing and meals as part of the compensation package, the IRS generally treats the fair market value as taxable income—unless the housing is provided for the employer's convenience and the employee is required to live on-premises as a condition of employment. This is common for estate managers.
Overtime. Under the FLSA, live-in domestic workers are exempt from overtime requirements at the federal level. But many states—including California and New York—have their own overtime rules for live-in workers that may still apply. Always check your state's labor laws.
Workers' compensation. Required in most states regardless of living arrangement. Given the salary level and the fact that the manager lives on-premises, adequate coverage is essential. Check your state's requirements →
Personal Assistants: The Gray Area
Personal assistants are where classification gets tricky. Some PAs are clearly household employees. Others might be contractors. Here's how to tell:
Employee (most common)
- Works primarily for your family
- Follows your schedule and priorities
- Works from your home or travels with you
- You control what tasks they handle and when
- Ongoing relationship (months/years)
Potentially a contractor
- Serves multiple clients simultaneously
- Sets their own schedule and availability
- Works from their own office
- Offers a defined service (bookkeeping, event planning)
- Has their own LLC, insurance, and business infrastructure
The reality: A personal assistant who shows up at your house every day, handles whatever you need, and works exclusively for your family is an employee. The title "personal assistant" doesn't change the analysis.
For the full classification test, see our employee vs. contractor guide.
See what you'll owe
Use our free calculator to estimate your nanny tax costs for 2026.
FAQ
Can I pay my household manager as a 1099 contractor?
Almost never. A household manager who works in your home (or manages your household), follows your direction, and is in an ongoing relationship is a W-2 employee. Misclassifying them as a 1099 contractor can result in back taxes, penalties, and interest. See our employee vs. contractor guide.
Do I need workers' comp for a household manager?
Most states require workers' compensation insurance for household employees. Even in states where it's optional, it's strongly recommended at these salary levels—the liability exposure from an on-the-job injury without coverage can be severe. Check your state →
What about health insurance?
There's no federal requirement for household employers to provide health insurance (the ACA employer mandate only applies to businesses with 50+ employees). However, health insurance is a standard part of compensation packages for household managers. Many families contribute to premiums or provide a stipend. These contributions are generally tax-free to the employee if structured through a proper plan.
My household manager uses their car for errands. How do I handle that?
You can reimburse business-related mileage at the IRS standard rate ($0.725/mile for 2026). Reimbursements under an accountable plan (employee submits receipts, excess is returned) are not taxable income and don't count toward the employment tax threshold. This is different from a car allowance, which is taxable.
Can I deduct my household manager's salary?
Generally no. Household employee wages are a personal expense, not a business deduction. However, if part of the manager's work is related to a home office that you use for business (and they maintain that office space), a portion might be deductible. Consult a tax professional for your specific situation.
I already employ a nanny. Is adding a household manager complicated?
Not really. You already have an EIN and a payroll process. Adding another employee means another W-4, another payroll calculation each period, and another W-2 in January. But it's the same system—just one more person in it. Your single Schedule H covers all household employees.