Updated October 19, 2026. Quick answer: Part I of Schedule H (Form 1040) figures social security tax, Medicare tax, Additional Medicare Tax withholding and any federal income tax withheld on household employee wages. For 2025 the instructions put social security tax at 6.2% each for the employee and employer, with a wage base of $176,100. Medicare tax is 1.45% each, with no wage base limit.
Quick reference
| Item | As the IRS form or instructions state it |
|---|---|
| Social security rate for 2025 | “For 2025, the rate of social security tax on taxable wages is 6.2% each for the employee and employer.” |
| Social security wage base | “Stop paying social security tax on and entering an employee’s wages on line 1 when the employee’s taxable wages reach $176,100 for the year.” |
| Medicare rate | “The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2024.” |
| Additional Medicare Tax | “you must withhold a 0.9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year.” |
| Line 2 | “Social security tax. Multiply line 1 by 12.4% (0.124)” |
| Line 4 | “Medicare tax. Multiply line 3 by 2.9% (0.029)” |
| Parking and transit exclusion | “For 2025, you can reimburse your employee up to $325 per month for qualified parking and $325 per month for combined commuter highway vehicle transportation and transit passes.” |
What Part I covers
The part is headed “Part I Social Security, Medicare, and Federal Income Taxes”. The instructions explain the purpose: “Social security and Medicare taxes fund retirement, survivor, disability, and health benefits for workers and their families.” “You and your employees generally pay these taxes in equal amounts.”
Income tax withholding is optional for a household employer. The instructions say “You’re not required to withhold federal income tax from wages you pay a household employee.” “You should withhold federal income tax only if your household employee asks you to withhold it and you agree.” “The employee must give you a completed Form W-4.”
The $2,800 test and what counts as cash wages
The cash wage test decides whether social security and Medicare tax applies to a worker. The instructions say “If you pay a household employee $2,800 or more in cash wages during 2025, you must report and pay social security and Medicare taxes on all the wages, including the first $2,800 paid to that employee.”
On what counts, the instructions say “Cash wages include wages paid by check, money order, etc.” and “Cash wages don’t include the value of food, lodging, clothing, transit passes, or other noncash items you give a household employee.” “However, cash you give your employee in place of these items is included in cash wages.”
Rates, the wage base and the employee’s share
The social security wage base applies only to that tax: “However, continue to withhold income and Medicare taxes for the whole year on all wages paid in 2025, even when the social security wage base limit of $176,100 has been reached.”
On Medicare, the instructions say “There is no wage base limit for Medicare tax.” If the employer pays the employee’s share too: “If you didn’t deduct the employee’s share from the employee’s wages, you must pay the employee’s share of tax and your share of tax, a total of 12.4% for social security tax and 2.9% for Medicare tax.”
Additional Medicare Tax on wages above $200,000
The instructions add a separate withholding rule: “You’re required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year.”
It is an employee-only tax: “There is no employer share of Additional Medicare Tax.” On the form, the line 6 label is “Additional Medicare Tax withholding. Multiply line 5 by 0.9% (0.009)”.
Lines 1 to 9 in order
The form lists the steps as “Total cash wages subject to social security tax” on line 1 and “Total cash wages subject to Medicare tax” on line 3. Line 5 is “Total cash wages subject to Additional Medicare Tax withholding”, and line 7 is “Federal income tax withheld, if any”.
Line 8 is the total: “Total social security, Medicare, and federal income taxes. Add lines 2, 4, 6, and 7”. Line 9 repeats the quarterly wage question, and the form’s answer for a no is “Stop. Include the amount from line 8 above on Schedule 2 (Form 1040), line 9.” For a yes, the form says “Go to line 10.” Part II is explained on the page for Schedule H Part II.
Where this comes from
The editions read for this page are Schedule H (Form 1040) (2025) and the Instructions for Schedule H (Form 1040) (2025), dated Dec 1, 2025, which are the revisions irs.gov served when they were read on 2026-10-19. Check the revision printed on the form you file, because a later revision can change the lines, the rates and the due dates. This page describes Schedule H (Form 1040) (2025), Household Employment Taxes; Instructions for Schedule H (Form 1040) (2025), as served on irs.gov on October 19, 2026. The IRS can revise a form after we read it, and the form you file and its own instructions control. Current and earlier revisions are listed on the IRS page Forms, Instructions and Publications. General information, not tax or legal advice.
Common mistakes
- Stopping all withholding at the wage base: the instructions say “continue to withhold income and Medicare taxes for the whole year”.
- Treating Additional Medicare Tax as split between employer and employee: “Additional Medicare Tax is only imposed on the employee.”
- Counting only the wages above $2,800: the instructions include “including the first $2,800 paid to that employee”.
- Assuming income tax must be withheld: “You should withhold federal income tax only if your household employee asks you to withhold it and you agree.”
Related: Schedule H instructions, Schedule H Part II FUTA tax, Form 1040 instructions, Additional Medicare Tax, Form W-3 instructions, and Form 1040 line 1b household employee wages.
Sources
- Schedule H (Form 1040) (2025), Household Employment Taxes: https://www.irs.gov/pub/irs-pdf/f1040sh.pdf
- Instructions for Schedule H (Form 1040) (2025): https://www.irs.gov/pub/irs-pdf/i1040sh.pdf
Read from the IRS pages linked above on October 19, 2026. General information, not tax or legal advice. The IRS form and the instructions for your own form control, and your own facts decide the outcome.