Understanding the True Cost of Nanny Care

In 2025, U.S. families spend an average of $870 per week on nanny care. That translates to roughly $45,000–$55,000 annually, depending on hours, job type, and extra costs.

This includes base wages and common additions like overtime, taxes, and benefits—often overlooked by new employers.

What Affects Nanny Wages?

Geographic Differences

Parents in metropolitan areas like San Francisco, New York, and Boston pay 20–40% more due to higher living costs and demand for skilled caregivers.

Professional Background

Nannies with degrees in education, fluency in multiple languages, or newborn care training earn higher pay. Expect to pay premium rates for specialists or those with 10+ years of experience.

Role Responsibilities

Driving, light housekeeping, tutoring, or managing multiple children all impact hourly rates. A nanny who also manages meal prep or after-school logistics may negotiate $3–$8 more per hour.

Regional Pricing Guide: Where Does Your State Stand?

Live-in Nannies vs Day Nannies

Live-in nannies typically earn a weekly flat rate between $700–$1,200, with housing and food provided. These positions often involve longer or more flexible hours.

Live-out or day nannies average $20–$28/hour and work standard hours, usually with commutes factored into pay expectations.

The Add-ons: Extra Charges You Should Expect

• Social Security and Medicare taxes (7.65% employer share)
• Overtime pay for >40 hours/week (time-and-a-half)
• Health stipends or insurance contributions
• Vacation, sick leave, and holiday bonuses
• Placement fees if using an agency (up to $5,000)

For complete payroll rules, check IRS Publication 926.

Creative Budgeting for Nanny Services

• Set clear expectations using a custom nanny contract
• Explore part-time or split-care options (nanny + preschool)
• Join a nanny share group with a nearby family
• Offer non-monetary benefits like extra PTO, transit passes, or flexible hours
• Use a tax-friendly Dependent Care FSA or claim the Child and Dependent Care Credit

Family Case Studies: Real Numbers, Real Choices

Brooklyn Family with One Child

The Goldsteins pay their live-out nanny $25/hour for 45 hours per week. With PTO and employer taxes, their annual cost is close to $60,000—but they value the consistency and peace of mind.

Midwest Nanny Share Success

Two Chicago families share a nanny who earns $27/hour. Each family pays just $13.50/hour, saving thousands annually while maintaining high-quality care.

Frequently Asked Questions

Is hiring a nanny more expensive than daycare?

For one child, daycare is usually cheaper. But if you have two or more children, a nanny can be competitive—or even more affordable—when factoring in per-child rates.

Do I need to withhold taxes for my nanny?

Yes. If you pay more than $2,700/year (2025 threshold), the IRS considers you a household employer. You’ll need to file nanny taxes legally.

Can I negotiate pay with a nanny?

Absolutely. Offer clarity, consistency, and perks like flexibility or PTO. Many caregivers are open to structured but fair arrangements.

Should I use a nanny agency?

Agencies offer vetting and background checks but can cost $1,500–$5,000 in fees. If you’re confident interviewing and checking references, independent hiring may save money.

Take Action: Plan Your Nanny Budget Wisely

Hiring a nanny in 2025 is a major investment—but one you can manage wisely. Use our free nanny cost calculator or connect with an expert through our contact page to get personalized guidance today.