How Much Does Nanny Cost?

Family’s nanny costs depend on various factors. Families should seek advice from an

agency familiar with local rates when hiring their ideal nanny; an agency will know

which rates are competitive while helping guide you in choosing an affordable

package of care for the right nanny.

Additional expenses associated with employing a nanny include holiday bonuses or

tips, transportation reimbursement (such as an unlimited monthly MetroCard

subscription), employment practices liability insurance coverage and liability

practices liability coverage. Some families opt to hire a payroll and tax service that

takes care of withholdings, taxes and filings for their nanny.

Nanny Salary

A nanny’s salary should reflect her duties; someone with little or no experience

should not receive as much pay as someone who has been looking after children for

25 years and holds multiple certifications such as newborn care, CPR or an

associate’s or bachelor’s degree in child development.

Pay rates should take into account how many hours a nanny works per week, with

overtime pay or time and a half being awarded accordingly.

Some families opt to provide housing for their nannies in addition to providing them

with a salary, which can ease commute time and give the individual their own

private space away from the family’s home. However, this should not be seen as an

alternative as housing costs quickly add up.

Nanny Travel

Well before taking your nanny on vacation, it’s essential to communicate exactly

how they will be paid for traveling expenses. Some families choose to offer them an

additional travel salary while others will offer overtime pay based on hours worked

during the journey.

No matter what amount you pay your nanny for travel expenses, they should always

be provided with private accommodation (i.e. they won’t have to bunk with your

children). Without enough privacy for them to relax in their own room or contact

loved ones before bedtime, many nannies won’t accept family trips if there is no

opportunity for relaxation in a relaxing space or calling loved ones from within their

own room before sleep arrives.

Consider whether or not she should be reimbursed for activities she takes the

children to while on your trip (like taking them on public transit or taking them to a

museum). Remember that nannies still have guaranteed hours when you’re gone so

even on their days off they will still be working!

Nanny Insurance

Insurance expenses should also be kept in mind when hiring a nanny. As you are

considered an employer when hiring full-time domestic workers, and must therefore

withhold or pay separate the equivalent of federal employment tax from their pay.

Some families opt to provide health insurance similar to what would be provided a

regular employee, though this is not mandatory. Furthermore, you should suggest

she add professional liability coverage as an extra safeguard in her policy as this

protects her if anything she says at playdates comes back and damages someone’s

property or causes any kind of conflict between friends.

Nanny unemployment insurance is also available and should be added onto any

homeowner’s policy for relatively inexpensive coverage that pays out should she

lose her job or become incapacitated while working for you. Many states also

mandate workers’ compensation coverage for nannies; therefore it would be wise to

check this requirement as soon as possible.

Other Expenses

Families may also need to pay for back-up care or replacement nannies in case their

regular nanny falls ill, with au pairs from abroad serving in exchange for room/board

and nanny duties – this option is particularly appealing to stay-at-home parents who

can’t rely on neighbors or relatives to assist. Unfortunately, full-time au pairs

typically charge higher hourly rates than traditional nannies.

Many families spend several hundred dollars for background checks that include

screening against sexual offenders, criminal convictions, driving records checks,

social security verification and employment histories of potential caregivers for their

children. Additional expenses might also include babysitting certification with

American Red Cross Babysitting or CPR certification or any specialized skills needed.

Family must pay federal and state unemployment taxes (about six percent of their

nanny’s wages). Some families opt to use a payroll service that offers all tax filing

and withholding for around $65 monthly.

 

 

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