Nanny Taxes in Connecticut

Household employers need to comply with tax, wage, and labor laws that affect nannies, in-home senior caregivers, and other household employees. While federal laws cover employers in all states, there are also state- and city-specific regulations that employers must follow. Here’s what you need to know about nanny taxes in Connecticut.

Connecticut Minimum Wage

Household employees must be paid at least the highest of the federal, state, or applicable local minimum wage rate. In Connecticut, the state minimum wage rate of $15.69/hour applies, and the state minimum wage will be indexed to the employment cost index and the rate will grow according to economic indicators.

Connecticut Pay Frequency

Connecticut changed their regulations to allow for either a weekly or biweekly payroll back in 2016. The state legislature repealed the weekly requirement and included the biweekly and weekly as compliant pay cycles. If you wish to pay your employee on a biweekly schedule, you need to fill out the waiver on the Connecticut Department of Labor website. It’s an electronic form submitted to the state for review and approval.

Overtime

Household employees in Connecticut are required to be paid at least time and a half for hours worked over 40 in a seven-day workweek. Overtime compensation is also required for live-in employees.

Connecticut State Unemployment Tax & Rate

In Connecticut, the new employer SUI (state unemployment insurance) rate is 2.8 percent on the first $25,000 of wages for each employee. Employers with previous employees may be subject to a different rate between 0.1 and 10.0 percent. This is an employer-only tax.

Workers’ Compensation Insurance

Household employers in Connecticut are required to have a workers’ compensation policy for any household employee who works 26 hours or more per week. Get a quote on workers’ compensation insurance.

Domestic Workers’ Bill of Rights

Connecticut’s Domestic Workers’ Bill of Rights ensures that employees have discrimination and harassment protections in the workplace.

Learn more about Connecticut’s Domestic Workers’ Bill of Rights.

Paid Family and Medical Leave Program

Household employees are now eligible to take benefits under Connecticut’s Paid Family and Medical Leave program. The program provides paid leave for life events including the worker’s own serious health concern; care for a child after birth, adoption, or foster placement; and care for a seriously ill or injured family member; among other reasons. The payroll deduction is 0.5% of wages. A household employee like a nanny earning $500/week would likely see a $2.50 pre-tax deduction on their weekly paycheck. There is no employer contribution to the program. However, household employers will need to remit employee contributions on their behalf to the Connecticut Paid Leave Authority. Learn more about the process for employers.

Household employees can take up to 12 weeks of partially paid time off for qualifying events.

Information on paid leave to share with your employees.

Pay Transparency Law

Connecticut’s pay transparency law applies to all employers within the state with one or more employees. The law also applies to employers within the state, even if their employees are located outside the physical confines of the state. This could come into effect for a Connecticut family that employs staff at a second home, vacation home, estate, or other location outside the state.

The law requires an employer to disclose the “wage range” that an employer anticipates relying on when setting wages for a position. According to the law, this may include reference to:

• Any applicable pay scale;
• Any previously determined range of wages for the position;
• Actual range of wages for current employees holding comparable positions; or
• The amount budgeted by the employer for the position

An employer must provide wage range information to an applicant upon the earliest of:

• The applicant’s request; or
• Prior to or at the time the applicant is made an offer of compensation.

An employer must also provide an employee the wage range for the employee’s position upon:

• The hiring of the employee;
• A change in the employee’s position; or
• The employee’s first request for a wage range

An applicant or employee may file a civil action within two years of the date on which the alleged violation occurred for compensatory damages, attorney’s fees and costs, punitive damages, and other relief. While the state may be unable to seek damages for the applicant or employee, they may issue a civil penalty against the employer if a violation is found.

Helpful Links for Nanny Taxes in Connecticut

Connecticut Department of Labor

Connecticut Department of Revenue Services

Federal Regulations

All household employers need to follow certain federal regulations including:

Fair Labor Standards Act (FLSA) Classification Guidelines

• Household workers are considered employees and not independent contractors. Learn more about misclassifying employees as independent contractors.
• Household workers are also non-exempt employees, which means they receive overtime pay of at least time-and-a-half for hours worked over 40 per workweek. Learn more about overtime pay.

FICA Taxes

Social Security and Medicare taxes are commonly referred to as FICA taxes. If you pay cash wages of $2,700 or more to any household employee in 2024 (or will pay a domestic worker $2,800 or more in 2025), you must withhold and pay FICA taxes. FICA taxes are 15.3 percent of cash wages. As an employer, you pay 7.65 percent (6.2 percent for Social Security and 1.45 percent for Medicare). Your employee's share is also 7.65 percent, which you can withhold from their wages or choose to pay yourself. You don't withhold or owe FICA taxes on wages you pay to your spouse, child under the age of 21, parent, or any employee under 18 at any time during the calendar year.

Federal Unemployment Tax (FUTA)

If you pay a household employee total cash wages of $1,000 or more in any calendar quarter, you'll owe federal unemployment tax. This is an employer-only tax. FUTA is six percent of cash wages on the first $7,000 you pay an employee.

Mileage Reimbursement

If your employee uses their own car in the course of their work, you can reimburse them for mileage. For 2024, the IRS has set the optional standard mileage rate at 67 cents per mile driven. This rate increases to 70 cents per mile on January 1, 2025. Paying mileage is not mandatory or you can reimburse your employee at a different rate. However, if the cost of mileage causes your employee to fall below minimum wage, then you need to reimburse them for mileage.

GTM Can Help with Nanny Taxes in Connecticut

Call (800) 929-9213 for a free, no-obligation consultation with a household employment expert. We’ll answer all your questions and show you how to comply with wage, tax, and labor laws as a household employer. Or, if you’re ready to have GTM Payroll Services handle it all for you, get started with our nanny payroll and tax service.

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