As a household worker caring for a family’s loved ones, you should view yourself as a professional because you truly are one. And just like the rest of the professional working world, you should be paid legally, rather than under the table. <\/p>\n\n\n\n
Being paid legally means taxes are involved<\/a>, but what you may not realize is that taxes provide you with several very important benefits and protections. Below are four short- and long-term benefits you receive when the family you work for pays you on the books:<\/p>\n\n\n\n This may not seem like a big deal, but there are several life situations where you\u2019ll need to provide payroll documentation. Some examples are applying for a car loan, a mortgage, a student loan, a credit card, an apartment lease, health insurance or auto insurance. If your employment is not documented, it\u2019s as if you don\u2019t work or have income, which makes it difficult to be approved for any of these items.<\/p>\n\n\n\n When paid legally, you are entitled to receive approximately 50% of your salary for up to six months if you lose your job due to no fault of your own. This benefit is free to you as your employer pays taxes toward the cost of the program.<\/p>\n\n\n\n When you retire, you\u2019ll receive money for living and medical expenses. How much you receive is based on several factors, including how much in Social Security and Medicare taxes your employers have sent to the IRS on your behalf during your working lifetime. Currently, according to the Urban Institute<\/a>, the average single female with average earnings, can expect to receive approximately $775,000 in Social Security and Medicare benefits after contributing roughly $498,000 in taxes over their working lifetime. That\u2019s about $1.56 in Social Security and Medicare benefits for every dollar in taxes they have withheld.<\/p>\n\n\n\n When paid as a professional, your employer matches the taxes they withheld from you on a dollar-for-dollar basis. That means every year you work under the table takes away from your potential retirement benefits. And if you\u2019re never paid legally, there\u2019s a chance you\u2019ll never be able to stop working.<\/p>\n\n\n\n As a requirement of the Affordable Care Act, you must have a health insurance policy. If you purchase an individual policy on the health insurance marketplace and are paid legally, you could qualify for a subsidy to lower the cost of your premiums. See how much you could save by using the KFF\u2019s Health Insurance Marketplace Calculator<\/a>.<\/p>\n\n\n\n Read more:<\/strong><\/p>\n\n\n\n1. A traceable employment history<\/strong> <\/span><\/h3>\n\n\n\n
2. Unemployment insurance benefits<\/strong><\/h3>\n\n\n\n
3. Social Security & Medicare credit<\/strong> <\/span><\/h3>\n\n\n\n
4. Healthcare subsidies<\/strong> <\/span><\/h3>\n\n\n\n