This refers to a person who works in your home as a full-time employee, such as a child-care provider, housekeeper or other personal service provider. Since 2007, as the employer you are responsible for paying Social Security and Medicare taxes for the employee if you pay the employee $1,500 or more annually. This is also sometimes called the "nanny tax." A payment of $1,000 or more given to the employee over any calendar quarter requires you to pay federal unemployment tax.