You must pay employees their overtime wages and exception pay within 16 days of paying their standard wages. Pay upon separation is due within 3 business days. Payroll FrequencyĪrizona requires that all household workers be paid daily, weekly, bi-weekly, or semi-monthly, but does not permit monthly payment. The federal government establishes and updates a maximum rate for non-taxable mileage reimbursement each year. Household employers in Arizona are not allowed to withhold state income taxes from their employee’s pay. You should inform your employees about their paid sick time at the start of employment. Paid Time OffĪrizona requires 24 hours of paid sick leave annually, accrued at one hour for every 30 hours worked up to 24 hours/year. Overtime or premium pay is not required for hours worked in excess of 8 per day or on weekends or holidays. Live-in domestics, again excluding companions, must be paid their hourly wage for all hours worked, without an overtime differential. According to Arizona law, employers may not deduct state income taxes from an employee’s paycheck.Īrizona defers to the FLSA, which requires that all domestics, excluding companions, be paid at no less than the greater of the state or federal minimum wage.Īrizona minimum wage is currently $14.35/hr and will increase each year after January 1.Īll live-out workers are to be paid an overtime differential of 1.5 times the hourly wage for hours over 40 in a work week. Income Taxesįederal and state income taxes are ultimately the responsibility of the household employee. You will make contributions to the IRS and Arizona to fund unemployment and worker re-training programs. You may choose to either collect your employee’s taxes via payroll deductions or fund these taxes yourself.

The household employer is responsible for the payment of all Social Security and Medicare taxes to the IRS. Your employee is due a W-2 form in January. Employee wages are reported to the Social Security Administration. Your state may require quarterly unemployment tax filings, as well as reports and remittance of state income taxes withheld, if applicable. Federal employment taxes are reconciled with the household employer’s annual Federal Income tax return. You have both Federal and State tax filing responsibilities. You are responsible for federal employment taxes when you pay household workers as little as $1,000 in a calendar quarter or when you pay any individual employee age 18 or over $2,700 in a calendar year. Failure to properly classify the worker and make the appropriate employment tax filings and payments is considered tax fraud by the IRS. Generally, these workers are your employees, not independent contractors. You become a household employer when you hire an individual to perform duties and provide services under your direction in your private home.

HomeWork Solutions is a nationally recognized “household payroll” service company, providing household employers nationwide with trusted and time saving payroll and payroll tax solutions. Payroll tax compliance for your new employee does not need to be terrifying, time consuming or expensive.

Arizona quarterly unemployment tax form