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 $14/hour applies. The rate increases to $15/hr on June 1, 2023. Beginning January 1, 2024, the state minimum wage will be indexed to the employment cost index and the rate will grow according to economic indicators.
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 not required for live-in employees and isn’t required when work is performed on a holiday.
Connecticut State Unemployment Tax & Rate
In Connecticut, the new employer SUI (state unemployment insurance) rate is 2.8 percent on the first $15,000 of wages for each employee. Employers with previous employees may be subject to a different rate between 1.9 and 6.8 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.
Helpful Links for Nanny Taxes in Connecticut
Connecticut Department of Labor
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.
Social Security and Medicare taxes are commonly referred to as FICA taxes. If you pay cash wages of $2,600 or more to any household employee in 2023 (or paid $2,400 in 2022), then you need to 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 it 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 the age of 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.
If your employee uses their own car in the course of their work, you can reimburse them for mileage. For 2023, the IRS has set the optional standard mileage rate at 65.5 cents per mile driven. 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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Free Resources on Household Employment
- Nanny Tax Calculator
- Nanny Tax Guide
- Tax Forms
- Tax Calendar for Household Employment
- Free eBook Chapter: Managing Payroll and Taxes
- Payroll & Holiday Calendar
- Guides & Checklists
- Employer Responsibilities
- Domestic Workers' Rights
- Workers' Compensation Requirements
- Government Websites for Household Employers