Part of the process of deciding whether or not to hire a nanny for your family includes considering the financial impact on your family. You know you need some help with childcare, and think that a nanny is the answer but what’s it going to cost you? In this article, we breakdown the cost of a nanny in the United States.
With the majority of households having working parents and 47% of the workforce being women, the demand for childcare has broadened. This is especially true if relatives, like grandparents are not available, there are no open daycare slots, or you want your child to have a more personal care approach. Nanny services are great because you can rest easy at work knowing that your child is in good hands with your own home.
Hiring a nanny is like adding a new family member to the mix and we want to make sure that you have all of the information you need, before opening your doors to a new family member. If you’re starting the caregiver search and are wondering how much does a nanny cost, read on! We will give you a breakdown of the most important factors that affect nanny salary.
The costs of hiring a nanny can widely vary depending on your area and family type. While some nannies are paid minimum wage, others have a starting pay of $25 per hour - so it is best to take into consideration all aspects of what you are looking for in a nanny before settling on a salary.
If you’re in the process of setting up your nanny’s paycheck, don’t forget that paying taxes is part of your obligation along with the nanny salary. Nannies must pay Social Security taxes as well as federal income taxes on their nanny salary.
As an employer, you’re also obligated by the federal government to pay Social Security taxes on your nanny’s salary. In many states, employers of nannies must also pay the state unemployment taxes, as well.
If you’re having a tough time figuring out how to deal with the set-up, there are services that specialize in handling payroll. Paying taxes for your nanny can be much simpler if you decide to let an outside agency handle the process.
Hiring a nanny involves adhering to employment regulations just like any other workplace situation. In most cases, nannies are classified as employees and not independent contractors. In order for nannies to be independent contractors, they need to provide their own hours, place of business and their own work tools when they work. Employees, on the other hand, have their hours, place of work, work tools and responsibilities set by their employer. Because by nature, a nanny typically works out of a family’s home and works based on the schedule the family requires, it makes it difficult to qualify a nanny as an independent contractor.
Nanny wages vary across the country, depends on the amount of experience a nanny has and whether you provide housing for her.
The national average hourly rate a nanny is $19.14 per hour The national average gross weekly salary for full-time live-out nannies is $766. The national average gross weekly salary for full-time live-in nannies is $670.
Most industries will pay employees more if they have an Associate's degree or higher. The same goes for nannies. If a nanny has a college degree in education, early childhood education or a related field, you can expect a higher nanny compensation. If the nanny has completed coursework toward an early childhood or education degree, you can also expect to pay more than someone without those qualifications. As a parent, you can feel reassured by having an experienced and educated person caring for your children.
Nannies all have very different schedules. Some choose to make nannying their full-time job and work 9 to 5, Monday to Friday while others work on a part-time basis.
Live-out nannies need to have clearly defined hours and days each week to accurately calculate pay. If they end up working longer hours than needed, families should also provide overtime pay. In Fact, 58% of nannies are compensated for OT.
With live-in nannies, the boundaries can get a little blurred. Will the nanny have to be on-call during all hours of the day? What type of household chores will be expected of them? When are their guaranteed “off-hours”? Keep in mind that the more time you want your nanny available, the higher your wage rate should be. But overall, the cost will be slightly less for a live-in nanny since
If your nanny works overtime, you should plan on compensating them for their time. Nannies who work more than 40 hours within a 7-day workweek must get overtime pay, according to the federal government. 58% of nannies in the United States work over 40 hours and are compensated accordingly.
You should plan on paying overtime pay for nannies at a compensation rate of 1.5 times your nanny’s hourly wage. If you feel like your nanny will be working more than 40 hours on a regular basis, then you can be built it into the salary. For instance, a nanny who works a 50-hour workweek might get a lump wage based on an hourly rate of 40 hours plus 10 hours of overtime pay. A nanny can work in as many hours as you both agree upon.
Where you live matters. Where you work and live can influence salary. Typically, large metropolitan areas have higher costs of living and therefore, salaries are higher. This holds true even for nanny salaries. If you live in a large city on the east coast, such as Boston, you can expect to pay more for a nanny than if you live in a rural Massachusetts town.
It costs more for a person to live in the city than it does to live in the suburbs and therefore, they must be compensated appropriately. A nanny in Missouri should not expect as much pay as a nanny in the Chicago area. It is more expensive to live in Chicago (and Illinois, in general) than it is to live in Missouri.
The most expensive states to have a nanny in are California, Washington, and New York. The most affordable state to hire a nanny in is Ohio with an average hourly rate of $15/hour.
As expected, more years of experience leads to higher pay. A more experienced nanny can provide a higher-quality level of care for your child - Several parents feel reassured by having an experienced and educated person caring for their children. If you want to discuss the benefits of a more experienced nanny you can also speak to other parents in your community.
A note as well, as a nanny works for a family for an extended period of time, it is common for them to receive a raise.
Just as you would expect from higher education or years of experience, the number of children a nanny cares for will increase the overall hourly rate. 76% of nannies in the United States care for 1-2 children. As you start having more children, however, the amount by which a nannies hourly rate increases, is nowhere near the doubling effect you’ll feel in a daycare.
The costs of hiring a nanny can widely vary. What’s most important is that you find a nanny that’s the best fit for you and your family, and when in doubt, reach out to nannies and get the conversations started, so that you can find the best fit for your family.