5. then you need to withhold your half of Medicare and Social Security.
Wrong, you as an employer withhold from employee but your share is above the wages, it is not withheld from anything. You add it to Payroll Liabilities the day of payroll and submit it electronically along with what you withheld from the employee.
And please do not forget Local Income Tax and and Local Services Tax if any.
For household employees the deduction of FWT (Federal Withholding Tax) is optional, unlike regular business employees but the state and local might not be.
