Yes, you can generally hire your own child or spouse in your small business - but two separate sets of rules kick in the moment you do: child-labor law (which limits what jobs, hours, and ages are allowed for a minor, with a narrow exception for parent-owned businesses) and payroll-tax rules (which treat wages paid to your own child or spouse differently from wages paid to anyone else). Getting either one wrong can mean back taxes, penalties, or - if a minor is hurt doing prohibited hazardous work - much bigger problems. Here is how the two systems fit together.
The child-labor rules, at a high level
The federal Fair Labor Standards Act (FLSA) is the starting point, and it sets a layered structure:
14 is generally the minimum age for nonagricultural employment.
16 is the age at which a young worker can generally work unlimited hours in any job that isn't declared hazardous.
18 is the minimum age for any occupation the Secretary of Labor has declared hazardous (things like operating many types of power-driven machinery, certain driving, roofing, and work involving explosives, among others).
For 14- and 15-year-olds, federal law also limits which jobs they can do and how many hours and how late they can work, especially on school days versus non-school days. Those hour limits are detailed and can change based on the season and the state, so do not rely on a number you've heard secondhand - confirm the current limits at dol.gov before scheduling a minor.
State law can be stricter than federal law, and often is. Many states set a higher minimum age for certain jobs, tighter hour limits, additional required rest breaks, or restrictions federal law doesn't have. When state and federal child-labor rules differ, the more protective rule for the minor generally controls. Because this varies by state and changes over time, confirm the specifics with your state labor agency rather than assuming the federal floor is all you owe.
Work permits and age certificates
A number of states require a work permit or age certificate before a minor can start a job - sometimes issued by the school, sometimes by the state labor department. Other states don't require one, or waive the requirement for work in a parent's own business. Because this is entirely a state-by-state matter, check with your state labor agency or department of education before putting a minor on the schedule, including your own child.
The family-business exception - and its limits
The FLSA does include a real exception for family businesses: a parent (or someone standing in the place of a parent) who solely owns a nonagricultural business may generally employ their own child of any age, at any hour, without the usual age and hour restrictions that would apply to hiring someone else's child.
But this exception is narrower than it sounds, and observed.org sees people misread it in both directions:
It never lifts the hazardous-occupations ban. Even a parent cannot put their own minor child in a job the Department of Labor has declared hazardous. The general hazardous-occupations minimum age of 18 still applies - only a handful of those occupations carry limited apprentice or student-learner exceptions for 16- and 17-year-olds under specific conditions.
It does not cover manufacturing or mining jobs at all, regardless of the child's age or who owns the business.
It generally requires sole ownership by the parent (or a partnership in which the only partners are the child's parents) - a business owned jointly with a non-parent, or organized as a corporation, typically doesn't qualify for this particular exception.
Farm work has a broader version of the exception: children of any age may generally work any time in any job on a farm owned or operated by their parent, and the hazardous-occupations rules that apply to non-family farm labor don't apply there. Nonagricultural work does not get that same breadth.
Because the boundaries here matter and the exact list of hazardous occupations is detailed, verify what applies to your specific job tasks at dol.gov's youth employment pages before assigning tasks to a minor, family member or not.
One more thing the family exception does not touch: minimum wage and other basic protections. The narrower exception is about age and hour limits, not about whether you have to pay at least minimum wage for real work performed - that's a separate question governed by ordinary wage law.
What to do before you put a minor - including your own child - to work
Confirm the minor's age against the job's requirements using dol.gov's youth employment resources, and separately check your state's age and hour rules, which may be stricter.
Find out whether your state requires a work permit or age certificate for this minor and this job, and get it before the first shift if so.
Review the hazardous-occupations list for anything close to what the job involves - equipment, driving, heights, chemicals - and don't assign that work to anyone under 18 even in your own business.
Keep the same basic records you'd keep for any employee: hours worked, wage rate, and job duties, so you can show the work was real and the pay was reasonable if ever asked.
Complete the same federal onboarding paperwork you'd use for any new hire (including Form I-9 employment eligibility verification), and check whether your state has a new-hire reporting requirement - the deadline for that varies by state, so confirm it with your state labor or revenue agency.
The payroll-tax quirks of hiring your own child
The IRS treats wages paid to a business owner's own child differently from wages paid to any other employee, but only under specific conditions:
If your business is a sole proprietorship, or a partnership where every partner is a parent of the child, wages you pay your child who is under 18 are generally exempt from Social Security and Medicare tax (FICA) for both of you.
Wages paid to a child under 21 are generally exempt from federal unemployment tax (FUTA), in that same ownership structure.
Federal income tax withholding still applies regardless of the child's age - these exemptions are about Social Security, Medicare, and unemployment tax only, not income tax.
These breaks disappear once the business is a corporation - a C-corp or S-corp paying wages to an owner's child owes the same FICA and FUTA taxes it would owe on any other employee's wages, with no family carve-out. The same is true of a partnership that has any partner who is not the child's parent. This is one of the concrete tax tradeoffs of incorporating a family business, separate from the liability-protection question.
The IRS pays attention to family pay arrangements specifically because they can be misused. The wage has to reflect actual work performed and be reasonable for that work - treat a family member's paycheck the same way you'd defend any other business expense.
If you hire your spouse
A spouse's wages are treated much like any other employee's: subject to federal income tax withholding and to Social Security and Medicare tax. The one notable exception is that wages paid to a spouse working in your business are generally exempt from federal unemployment tax (FUTA). There is no age-based exemption here the way there is for a child - the FUTA exemption applies regardless of how long you've been married or the spouse's age. (How the wages are handled can also depend on how the business is structured and whether your spouse is a co-owner, so it's worth confirming your specific setup.)
For the full, current rules on family employees - including how they apply to different business structures - see the IRS's Family Employees page, and confirm anything unusual about your setup (a multi-member LLC, a step-parent situation, a spouse who's also a co-owner) with a CPA before you run the first payroll.
Where this connects to other duties you already have
Hiring any employee - family or not - also puts you on the hook for the general employer obligations covered elsewhere on this site: verifying work eligibility, workplace safety, and following wage and hour law for the hours actually worked. If a family employee is injured on the job, that's a workers' compensation question, not a child-labor or tax question, and the coverage requirement for family employees can itself vary by state - check with your state workers' compensation agency. If you're deciding between a corporate structure and a sole proprietorship partly because of how it affects hiring family, that decision has liability consequences well beyond payroll tax, and is worth a conversation with an attorney or CPA rather than a rule of thumb.
The bottom line
Hiring your own child or spouse is common, legal, and can come with real payroll-tax simplification - but "it's just my kid" doesn't suspend hazardous-work rules, doesn't remove your state's own child-labor layer, and doesn't erase your normal recordkeeping and withholding duties. Confirm current ages, hours, and hazardous-job definitions at dol.gov, confirm your state's specific rules and any work-permit requirement with your state labor agency, and confirm the tax treatment for your business structure at irs.gov.
This article is general information, not legal, tax, or financial advice. For questions specific to your business, consult a qualified attorney or CPA, and use the free official tools at IRS.gov, SBA.gov, SCORE, and your state's Small Business Development Center.
Frequently asked questions
Can I just pay my teenager cash and skip the paperwork since it's a family business?
No. Even inside a family-owned exemption, wages to a child are still subject to federal income tax withholding, and the work still has to be real and the pay reasonable for what was done. Paying informally and not reporting it can create tax problems for both of you and won't protect you if there's a wage or labor dispute later.
Does the parental exception mean my 12-year-old can do anything in my shop?
No. The federal exception only lifts the usual age and hour limits for nonagricultural work in a business you solely own (or own together with the child's other parent). It does not override the ban on hazardous occupations - 18 is the minimum age for those, and only a few carry limited apprentice or student-learner exceptions for 16- and 17-year-olds - and it does not apply to manufacturing or mining jobs at all, regardless of age. States can also impose their own limits on top of this.
Do I need a work permit to employ my own child?
That depends entirely on your state - many states require a work permit or age certificate for minors even in a family business, while others exempt family employment from that specific requirement. Check with your state labor agency before assuming either way.
If I hire my spouse, do I owe unemployment tax on their wages?
Generally no - wages paid to a spouse working in your business are exempt from federal unemployment tax (FUTA), even though they're subject to Social Security, Medicare, and income tax withholding like any other employee's wages. (Some states may still assess state unemployment tax, so confirm with your state agency.)
Does hiring my child change once they turn 18?
Yes. The Social Security and Medicare tax exemption for a child's wages applies only while they're under 18, and the federal unemployment tax exemption ends at 21. Once your child ages past those thresholds, their wages are taxed the same as any other employee's.
This article is general legal information, not legal advice, and may not reflect the most current law or the law in your jurisdiction. Laws vary by state and change over time. For advice about your specific situation, consult a licensed attorney.
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