How Much Does a Nanny Cost?

When considering hiring a nanny, be sure to weigh all costs associated with hiring
one. In this article we cover everything from taxes and background checks.
A nanny’s rate depends on various factors, including her cost of living and travel
distance; as well as the nature of her responsibilities such as cooking or
housekeeping.

Cost of living

Families should consider the cost of living when setting their nanny budget. A
minimum hourly rate can serve as a good starting point, but be sure to factor in
taxes, background checks, and supplementary child care in case their nanny
becomes sick or needs time off work.
Many families ask their live-in nannies to reside in separate apartments or houses
from them in order to cut living expenses, but this arrangement can be taxing for
both parties involved – the nanny may become less efficient due to commute times
between her place of residence and that of the family residence, making her less
productive overall and not being able to separate work when she returns home from
the day job.
Nannies should receive regular raises and overtime pay (time and a half) when
working more than 40 hours each week, along with reimbursement for mileage costs
and auto insurance policies based on state.

Hourly rate

One of the primary factors determining how much a nanny costs is their hourly rate.
Nannies generally receive a flat salary per week or month based on how many hours
they work; however, overtime charges may incur extra fees.
A nanny’s wages depend on location, demand and cost of living factors; depending
on the job there may also be additional compensation for special skills or
certifications.
Many families opt for nanny payroll services when paying their nannies, which
handle all federal and state withholdings and taxes as well as streamlining year-end
filings and paystubs, making the experience less taxing for both employers and
nannies alike. Furthermore, some nannies receive holiday bonuses or gifts from their
employers; other benefits could include health insurance, mileage reimbursement or
cell phone allowance.

Experience

Nannies with advanced training or experience caring for multiple children typically
earn more. Nannies who live or commute to their jobs should be reimbursed for
travel expenses and mileage costs, plus any errands such as grocery shopping or
dog walking that they perform during the job.
Families should carefully consider whether their child requires a nanny who can
transport him or her to extracurricular activities such as sports and music lessons, if
so they should provide or reimburse the nanny for using her own vehicle.
Some families hire nannies to assist them with household tasks like cooking, laundry
and cleaning – though this isn’t typical, it may be possible to negotiate this
arrangement with the nanny in question.

Insurance

Nannies should always invest in insurance as they are responsible for caring for
other people’s children. Although an accident or injury may never happen again,
having coverage can make all the difference when an incident does arise.
Nanny insurance should cover personal injuries and property damages as well as
workers compensation. This type of policy tends to be affordable and can easily be
added on to existing homeowner, renter or condo policies.
Nannies may also benefit from a Qualified Small Employer Health Reimbursement
Account (QSEHRA), an IRS-approved plan that reimburses them for individual health
insurance premiums and qualifying out-of-pocket medical expenses. Some families
provide transportation reimbursement or MetroCards so their nannies can get
around town easily.

Travel

Consider your nanny’s travel time carefully if she resides in a large city; those
working in major metropolises typically make more than those based in smaller
Midwestern towns. When setting their hourly rate, also include mileage/gas
expenses into consideration.
Another popular arrangement for families is hiring a live-in nanny, meaning one who
lives within their household with them and therefore doesn’t need to commute each
day; however, this arrangement can be costly as she must cover her own rent and
utilities costs.
Some nannies offer their services through what’s known as nanny sharing
arrangements, which can save both families money. Make sure you find shared
families who share similar expectations and lifestyles for optimal success!