How Much Do Nanny Cost?

How Much Do Nanny Cost?

Nanny expenses vary based on where your family resides and what services are
required of a nanny, such as transportation (whether via monthly metro card
subscription or reimbursement for mileage if using their own car) and food.
Families must also factor in the costs associated with regular raises and annual
background checks for their nannies, in addition to providing workers’ compensation
insurance and employment practices liability protection for them.

Rates of pay

Nanny rates depend on factors like location, number of children being cared for and
a family’s individual needs. Families usually pay higher rates for experienced
newborn or other special-need nannies. Some providers also charge extra if they
require certifications such as CPR training or possess American Red Cross
babysitting certification or possess a college degree in early childhood education.
Other expenses for full-time nannies or sitters can include travel and food allowance.
In New York City it’s common to provide them with an unlimited monthly metrocard
to facilitate their commute to and from work, and many families also reimburse their
nannies when using their vehicle for business related travel.
If your nanny is considered an employee, it’s essential that you consider household
employment taxes (commonly known as ‘nanny tax’) carefully. According to IRS
requirements, when paying out more than $2,600 in total in one year they must be
submitted as tax payment.

Travel expenses

Travel expenses are an essential component of a nanny’s compensation package.
Unless they live with their family, travel expenses such as accommodation, airfare or
mileage reimbursement and meal pay should be provided while on duty as well as
any outings included with their trip.
While it may seem unusual to pay your nanny for traveling with the family,
remember that this is part of her job and she should expect it. Traveling for work
should never be treated as vacation – overtime should be calculated according to
hourly rate as should any associated fees and expenses; any PTO requests during
travel should never be asked of as this would make them feel exploited.

Workers’ compensation insurance

Workers’ compensation insurance provides benefits that cover medical costs and
part of her wages in case she gets hurt or sick while on the job, regardless of which
state it’s required in. While this coverage isn’t necessary in all states, having it could
prove invaluable – particularly for households with children.
Families pay to ensure nannies possess CPR and first aid certification; other fees
could include fees associated with finding your nanny through different sources, like:
Using a nanny agency may incur additional fees such as administrative costs and
placement fees. Some families reimburse their nannies for mileage costs or provide
them with unlimited monthly MetroCards to assist in transportation needs. In
addition, employers should purchase employment practices liability insurance (EPLI),
commonly known as EPLI to protect themselves against cases of unlawful
termination or discrimination (such as age or race discrimination). It can usually be
purchased as part of workers’ comp bundle and online quote can provide estimates.

Health insurance

Nannies may be offered health insurance as part of their benefits package, although
this isn’t required by law. Offering health coverage may help a family stand out in
the job market and could qualify them for tax credits to offset its cost; but be sure to
consult a tax professional prior to offering such incentives. There are two types of
health reimbursement arrangements (HRAs), Qualified Small Employer HRA
(QSEHRA) and Individual Coverage HRA (ICHRA), where QSEHRAs limit
reimbursement amounts while ICHRAs don’t.) QSEHRAs provide tax credits; consult
a tax professional before providing tax credits – both provide tax benefits when
applying tax credits against coverage costs of their nanny; both plans provide tax
breaks against coverage costs; consult tax professional regarding available credits
available under these plans if appropriate.
Many other benefits, including paid vacation and transportation reimbursement are
also common among nannies. Many families offer two weeks of paid vacation.
Furthermore, some provide a transportation stipend or reimburse gas and toll costs
as necessary. Other families offer holiday bonuses or tips as part of their agreement.
In some states it may even be required by law.


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