While Texas does make household employee payroll taxes a bit easier than some states (hello California), there still are some steps you must take to remain compliant in the Lone Star State.
Texas minimum wage
Texas follows the federal standard for minimum wage of $7.25 per hour. The minimum wage for overtime hours is $10.87.
Texas new hire reporting
Upon hiring your nanny, you have 20 days to report the hire to the state. You can report the new hire here.
Wage thresholds for Texas payroll (nanny) taxes
Under Texas laws, a household employer becomes liable to pay state unemployment taxes on their nanny if the employer pays gross wages of $1,000 or more in a calendar quarter. Once you become liable as a domestic employer, you must pay state unemployment taxes on all wages paid during that year.
Texas unemployment tax rates
|Tax||Taxable Wages Per Year||Tax Rate||Maximum Tax|
First $9,000 (2013 and 2014)
New employers start at 2.7%
|$243 at the 2.7% rate.|
Unemployment tax registration
You must register with the Texas Workforce Commission in order to report and pay the unemployment taxes once your nanny reaches the $1,000 dollar wage threshold. You can register with the TWC here.
Reporting wages and paying unemployment taxes
Texas rules require all household employers to report their nanny’s wages and pay the corresponding taxes electronically. Typically, employers must report and pay quarterly, but if you are only reporting wages for domestic employees, then you may pay once a year. To do so, you must submit Form C-20, Domestic Employer’s Election. Then you will be able to logon to the TWC website and pay your taxes once a year.
Texas Workers’ Compensation Insurance
Texas does not require household employers to purchase worker’s compensation insurance. It is a good idea to make sure you are protected from liability.
Texas Nanny Tax Calculator
Use the calculator below to get an estimate of what your household employee payroll/nanny taxes will be: