You don't know what you're talking about.
For a household worker who makes more than $1600 or $1700 per quarter, I forget, social security and Medicare taxes are 15.3% of cash wages.
The employee's share is half, which can be paid by the employer or withheld. The employer's, repeat, the employer's share, is the remaining half.
We pay the full tax, do not withhold. Why? The wages are low and the people need every penny they get. It can also be a bit of a pain from an accounting standpoint. I know people who do the same thing we do so I doubt it is too rare.
There is also the federal unemployment tax which is part of what must be collected in addition to whatever a state requires:
workforcesecurity.doleta.gov
Federal Unemployment Tax Act
The Federal Unemployment Tax Act (FUTA), authorizes the Internal Revenue Service to collect a federal employer tax used to fund state workforce agencies. Employers pay this tax annually by filing IRS Form 940. FUTA covers the costs of administering the UI and Job Service programs in all states. In addition, FUTA pays one-half of the cost of extended unemployment benefits (during periods of high unemployment) and provides for a fund from which states may borrow, if necessary, to pay benefits.
Federal Tax Rate
The FUTA tax rate is 6.2% of taxable wages. The taxable wage base is the first $7,000 paid in wages to each employee during a calendar year. Employers who pay the state unemployment tax, on a timely basis, will receive an offset credit of up to 5.4% regardless of the rate of tax they pay the state. Therefore, the net FUTA tax rate is generally 0.8% (6.2% - 5.4%), for a maximum FUTA tax of $56.00 per employee, per year (.008 X $7,000. = $56.00). State law determines individual state unemployment insurance tax rates. For a table of current tax rates and taxable wage base information for individual states, Click here and select Significant Provisions of State UI Laws.
State Unemployment Tax
The state unemployment tax, paid to state workforce agencies, is used solely for the payment of benefits to eligible unemployed workers.
Domestic Employers Coverage
Employers of domestic employees must pay state and federal unemployment taxes if they pay cash wages to household workers totaling $1,000, or more, in any calendar quarter of the current or preceding year. A household worker is an employee who performs domestic services in a private home. Examples of household employees are: babysitters, caretakers, cleaning people, drivers, nannies, health aides, yard workers and private nurses.
So it gets complicated, big deal. These very wealthy folks have accountants who can not only do it for them but, for crying out loud, advise them on how to do it properly. I am living proof that it isn't that hard.
The ultimate responsibility is that of the employer, who is presumed to know what he or she is doing.
Are you an apologist for these idiots who cheat employees who are at the bottom of the economic barrel?
I have no respect at all for anyone who does this esp. if it means that the SS benefits do not build up. |
