How Much Do I Pay a Nanny?

Setting a salary for a nanny can be a tricky proposition. When presented with the issue, many people are completely unsure about how to proceed. From the parents’ standpoint, throwing a random number out there is never a good idea. From a nanny’s point of view, it is important not to be sold short in terms of pay. The following guide includes many tips, techniques, strategies, and pieces of advice that help to shed light on this vexing issue. By reading through it, nannies and parents alike should feel more confident about how to proceed.

Live in and Live out Nannies

A nanny’s salary can vary considerably; some factors which can affect the salary a family will need to pay to include:

  • The number of hours of care is needed each week. A full-time nanny will typically average 45 hours per week. Longer scheduled days will require additional compensation. If the work week is expected to be greater than 55 hours per week, the family is advised to split the job between two employees.
  • The geographic region of the country. The highest salaries are paid in major metro markets such as Boston, New York, Washington, Atlanta, San Francisco, and Austin.
  • Whether the position is live-in or live-out (in some areas a live-in nanny’s salary is less; in other parts of the country there is little or no difference)
  • The nanny’s experience
  • The number of children and the job responsibilities.
  • Benefits, such as health insurance.

To avoid misunderstandings, be clear that the salary offered is gross or net (take home amount) and state what deductions, if any, will be made from the offered salary. If offering a net wage, be very specific as to whether you are paying US social security/medicare taxes ONLY for the employee (s/he is responsible for US Federal and state income taxes) or whether the net includes your being responsible for all nanny income taxes also. You may wish to consult for guidance in these areas. Additionally, in the United States nannies are subject to Federal (and generally state) minimum wage rules.

The following are some general weekly wage guidelines assuming a 45-50 hour work week and one or two children. All figures are in US dollars and representative of the Year 2019 wages:

  • 18 – 20 years old, or less than 2 years verifiable child care experience – $325-$450 live-in; $8-12 hour live-out.
  • 21 years or older, 2 or more years verifiable child care experience, no prior nanny experience (note that college education puts you to the higher end of the salary range) – $450-$600 live-in; $10-15 hour live-out.
  • Two or more years of nanny experience, and/or a college degree in a child-related field – $450-800 live-in; $10-20 hour live-out, higher in major metro markets.

Part-Time Nannies

In addition to being hard to find, these jobs command a premium wage. These positions are almost exclusively live-out and paid on an hourly basis. Often there is a weekly guarantee, needed to retain dependable help. Hourly rates start at $12 per hour and are as high as $20 – 25 per hour in affluent areas such as the San Francisco Bay Area, Westchester (NY), Fairfield (CT), and Montgomery (MD) Counties. We have observed that affluent areas not well served by public transportation have the highest prevailing hourly wage.

These figures are just guidelines, local job markets and specific employment conditions cause considerable variation. Specifically, CA, CT, DC Metro, MA, and NY salaries are quite a bit higher than national averages. Be aware that these are “gross wage” figures before payroll taxes have been deducted. You can use a payroll tax calculator.

The Compensation Package

The nanny will typically expect to be paid either every week or every other week. A full-time nanny will expect to be paid her regular wage for 52 weeks a year, even if the family takes additional holidays without her. Families can pay the nanny in either cash, personal check, or using a payroll service with Direct Deposit. The nanny’s paycheck should NEVER be delayed or forgotten.

A nanny’s compensation package today is not limited to her salary. Many nannies ask for and receive the following:

  • paid vacation (typically 1 – 2 weeks at family’s scheduling discretion) **
  • health insurance (typically 50% paid by the family for the first year, often fully paid after the first year)
  • sick days (typically 5 per year) **
  • reimbursement for mileage if the nanny is required to use a personal automobile to transport children

The nanny should be compensated for all hours when she is required to be available to provide care for her child. If your child attends school but your nanny must be available to care for him during those hours if he is sick or school is canceled, these hours need to be considered part of her work day.

Another area that is often misunderstood involves payment for days not worked. Your nanny will expect to be paid for all days she is prepared to work, even if you decide to take your family away for a portion or all of any given week. The nanny will also expect to receive and be paid for the following federal holidays: New Year’s Day, Presidents Day, Memorial Day, July 4th, Labor Day, Thanksgiving, and Christmas. Most families also include the Friday after Thanksgiving. If you are uncomfortable with any of these expectations, however, let the nanny know in the Work Agreement how you will handle holidays and regularly scheduled days which are not worked due to no fault of the nanny, so that this does not come as an unexpected surprise, three months into the job.

** A more recent trend in developing the nanny compensation package is to offer Flex Days in lieu of paid vacation and sick days. The Flex Days are paid days to be used at the nanny’s discretion. Typically there are 10 – 15 days, and they can cover sick days, personal days, and vacation (pre-scheduled according to your agreement).

Bonuses

Some families offer their nanny an incentive payment after the first (and subsequent) year’s employment – variations include a bonus for signing on for an additional period of time (not necessarily another year – sometimes six-month stretches) or the payment of a portion or all of the tuition payment for an evening or weekend class at a local community college. Bonuses generally reflect the family’s appreciation for continuity of care for their child(ren) and the fact that they will not have to spend additional money recruiting a replacement.

Other incentives include health club membership, airfare home, and payment for all or part of health insurance premiums. Remember, most bonuses and non-cash compensation are taxable income to the employee and should be reported as such.

Overtime

In the United States, hours worked in excess of 40 per week, typically, must be compensated at time and a half. The Federal Fair Labor Standards Act applies this rule to domestics who do not reside with the employer (“live out” or “come and go”). Domestics who live in with the employer must be compensated for every hour of work, but the time and a half rule does not apply. (Note: in some states, the overtime requirement for time and a half applies to live-in nannies as well); however, your nanny may interpret overtime to mean hours worked in excess of those originally agreed upon (regardless of whether those “originally agreed upon” hours were 20 per week or 50 per week. It is a good policy to clarify what is meant by this term from the very beginning, especially since occasional overtime needs are often one of the reasons a family has arranged for a nanny.

NOTE: Nannies are covered by the Fair Labor Standards Act. This means that nanny salaries must meet minimum wage tests, and live-out employees are entitled to the overtime differential (time and one-half) for all hours in a week over 40. Hypothetically, if a live-out nanny works 50 hours per week, her salary cannot be below minimum wage. Mathematically, this is calculated as follows:

  • First 40 hours [40 * 5.15] = $206
  • Overtime hours [(10 * 1.5) * 5.15] = $77.25
  • Total minimum salary: $283.25

The reality is that very few families will find a competent, reliable nanny willing to work at the minimum wage.

Pay Days

The Work Agreement should specify the frequency of paydays – each Friday, etc. and you should be prepared to pay your employee early if you will not be home on payday or if you and your family will be out of town on the scheduled pay date.

Expenses

The nanny who is required to provide transportation for your child in her vehicle needs to be reimbursed for her mileage. This is not purchasing a tank of gas, but rather providing true mileage reimbursement to allow the nanny to recover the cost of gas, wear and tear, maintenance, and depreciation of her vehicle.

The nanny may have other out-of-pocket expenses that she incurs in the course of her job. This can be picking up bread and milk at the grocery, cab fare, providing the child with school activity fee money, or entertainment such as movies or a McDonald’s lunch. Most families find that a ‘petty cash’ fund of $20 – $50 that is replenished by the family regularly works well. The nanny should be required to provide documentation of all expenses – the grocery receipt or just a log of expenses. The family and nanny should discuss in advance expenses the family are comfortable with (a weekly lunch out may be one) and expenses they wish to approve in advance ($30 Circus tickets may be an example). If the nanny pays for family expenses from her personal funds, she should be promptly reimbursed by the family.

Reviews

Reviews and the opportunity for increases in compensation provide an incentive for a nanny to continue to strive to do his or her best. Families are advised to consider their ability to set a schedule for review and salary adjustment and let the employee know when he or she can expect to be considered for an increase in compensation. The nanny should expect at a minimum an annual review. Salary increases for good performance average 5% annually. The outstanding employee may merit a greater increase or a bonus in addition to an increase. Of course, if the nanny is not meeting your expectations, please don’t wait a year to address the problems. If the family maintains good open lines of communication with their nanny, performance problems will either go away or the family will replace the nanny. Poor communication between the adults is a common cause of nanny turnover.

Families go to considerable effort to secure a quality caregiver – don’t forget the need to make sure that the employee knows how much the family values him or her and wants to keep them!

Ways to Set a Nanny Salary

  1. Sit down and map out the amount of actual work that your nanny will be doing. What will her daily responsibilities be? Will she be working non-stop throughout her daily shift?
  2. Will your nanny live with you, or will she come in every day? Room and board will play a role in how much money you have to pay your nanny; a live-in nanny will cost you less cash because room and board are forms of compensation.
  3. The number of years of experience that a nanny has will play a role in how much she pays she expects. If you want an experienced nanny, you will have to pay more.
  4. You will have to factor in things like health insurance and taxes. Leaving these things out will cause you to end up with unrealistic salary levels and could result in a lot of confusion.
  5. The amount that you pay your nanny should not exceed 35 percent of your pre-tax income. Exceeding that amount could make it difficult for you to afford your nanny.
  6. The quality of a nanny’s references must be taken into consideration when determining her salary. Are her references recent? Do they come from people with whom you are familiar? Great references will result in higher pay.
  7. If an agency is involved, you may not have a lot of wiggle room when it comes to determining a nanny’s salary. Make sure that you have an idea about what nannies from that agency earn before you proceed.
  8. How much education does the nanny have? Highly educated nannies can command higher salaries than those who do not have extensive educational backgrounds. Education is valuable, so you should expect to pay more for it.
  9. How many children will be under the nanny’s care? Understandably, the cost of hiring a nanny for a single child is going to be lower than hiring a nanny to watch over three or four children.
  10. Figure out how many hours the nanny will be working per week. If the total exceeds 40 hours, you will have to factor in overtime pay, which will raise the amount that you have to pay your nanny.

Location Matters when it Comes to Nanny Pay

  1. The median income of your specific region will play a role in how much you pay your nanny. Nannies in more upscale areas generally make more money.
  2. The going rate for nannies in the area is a huge factor in how much you can expect to pay. Any nanny that you consider should be aware of what the going rate is and will demand a salary accordingly.
  3. How many nanny agencies are in your area? Areas that have higher concentrations of such agencies tend to have higher average nanny salaries.
  4. Is your home accessible to public transportation? The less cumbersome it is for a nanny to arrive at work each day the less you should have to pay. If you live off of the beaten path, you can expect to pay more.
  5. The quality of the schools in your area will play a role in how much you will pay your nanny. High-quality, experienced nannies tend to flock to areas that have great schools.
  6. Is there room in your home to accommodate a live-in nanny? Live-in nannies actually cost less money out-of-pocket than those who come in and leave each day.
  7. Your proximity to colleges and universities will play a part in how much you can expect to pay your nanny. College towns tend to have more nannies available, and the glut usually results in lower salaries across the board.
  8. The amount that you pay your nanny will probably be lower if you live within a reasonable distance of parks and other activities. The easier it is for your nanny to keep the kids occupied the less you can expect to pay.
  9. Living in a rural area can be a double-edged sword. If it’s difficult for nannies to get to your home, you will pay more. Lower median incomes, however, may mitigate the amount that you ultimately pay.
  10. There is more competition in urban areas, but the amount that you pay will depend on the specific neighborhood in which you live.

Factor in a Nanny’s Room and Board

  1. Figure out the value of the meals that you will be providing for your nanny. You can exclude that amount from the total amount of her salary.
  2. Figure out the value of the lodging that you will be providing for your nanny. This will also reduce the amount that you will have to pay her.
  3. Calculate the size of the room that your nanny will have. The more space that she will have the higher the value of her room and board will be.
  4. Will your nanny have a basic room, a suite, or an actual apartment? The features of her living space will play a role in how much money you will have to pay her. If she has an actual apartment with a kitchen, her room and board will be more valuable.
  5. Keep in mind that the room and board that you provide are considered to be a part of your nanny’s compensation. If you didn’t provide it, she would have to go and get them elsewhere.
  6. Will your nanny have her own bathroom, or will she have to share one with your family? By giving your nanny more privacy, you increase the total value of the lodging that you provide.
  7. How much would similar lodging elsewhere in your town or city cost your nanny? Figure out the square footage of her quarters and find out what the going rate is for similar spaces.
  8. How much will your nanny save by not having to pay for utilities? Unless you plan to somehow charge your nanny for utilities, you should factor this expense in as well.
  9. Will you be providing perks like cable TV, Internet, a laundry room, and other things? All of those features would cost your nanny a lot more money in a regular apartment. As such, they should be taken into account when calculating salary.
  10. Presumably, your nanny will not have to deal with a roommate when she works for you. Her standard of living will be higher, which will be a great incentive. You can use that fact to pay your nanny a little less.

Handle Salary versus Overtime Hours

  1. Figure out if you will be able to get by with a nanny who strictly works 40 hours per week. Will that cover you and your spouse for all of the hours in which you will be gone?
  2. If you are going to need a nanny for more than 40 hours per week, you are going to have to pay her overtime. It is important to figure this out as early as possible.
  3. The U.S. government requires you to compensate your nanny for any overtime that she works. You must pay her extra wages for every hour over 40 that she works each week.
  4. In terms of compensation, you are required to pay your nanny a rate of 1.5 times her regular hourly rate for every hour over 40 that she works each week. Keep this in mind when you are calculating her salary.
  5. If overtime is going to come into play, you can roll it into your nanny’s weekly or monthly salary. Figure out how many hours of overtime she will be working and adjust her weekly or monthly salary accordingly.
  6. Come to an agreement about salary with your nanny before she begins working with you. She must agree to any overtime that she will have to work.
  7. If your needs change over time, you can always adjust things. If your nanny’s pay will decrease due to those changes, however, she may decide to seek greener pastures.
  8. In order to avoid paying overtime, you could juggle your work schedule. If possible, work it out so that one spouse works slightly different hours than the other.
  9. Another way to avoid paying overtime is by scheduling your children’s activities to reduce the burden on the nanny. If she drops them off at an activity, schedule it so that you can pick them up. She would go off the clock after she drops them off.
  10. Do not determine your nanny’s weekly hours down to the wire. It is important to leave some wiggle room in case issues arise. It’s worth it to pay a tiny amount more in order to reduce stress.

Why it is Important to Pay Nannies Well

  1. A quality nanny is more likely to develop a great relationship with your kids. That relationship will provide many benefits through the years.
  2. Educated nannies command higher salaries. It is worth it to hire one, though, because she will enrich your child’s life in many ways.
  3. A live-in nanny provides more security, especially for younger children. You can get away with paying a live-in nanny less in terms of salary, but make sure that her room and board benefits are great.
  4. Paying a nanny well reduces the odds that she will quit finding better pay elsewhere. Your children will benefit from having the same nanny over a long period of time.
  5. It is important for kids to have as many people to turn to as possible. A high-quality nanny can be one more person, which can pay off well for your child.
  6. Nannies who are trained in first aid and CPR typically cost more. However, those skills could prove to be the difference between life and death and can help to lessen the odds of serious injuries to your children.
  7. It is worth it to take the time to find a nanny who genuinely loves kids. An energetic, fun nanny can be a huge asset, and it is worth it to pay more for those types of skills.
  8. Nannies who are willing to lay down the law when necessary tend to get paid more than less strict nannies. Make sure that the nanny you choose balances out that strictness with kindness.
  9. You are more likely to find a nanny who abides by your wishes and rules when you are willing to pay more. Skimping on the amount that you pay your nanny is never a good idea.
  10. Highly compensated nannies tend to be happier in general. Happier nannies generally provide higher quality care than those who are barely eeking out a living.

Advantages of Passing the INA Exam and Getting Other Certifications

  1. As a nanny, being able to show prospective employers that you have passed the INA exam will make you more credible. It is not something that all nannies do, so it can be very beneficial.
  2. Obtaining your certifications in first aid and CPR will make you more marketable as a nanny. Parents want to know that you can handle emergency situations.
  3. Going the extra mile by obtaining as many certifications as possible is well worth it. The amount of effort that it requires is more than balanced out by the increased job opportunities and better pay rates.
  4. Certifications serve as concrete proof of your skills and abilities. Instead of expecting prospective employers to take your word for it, you can show them documentation that proves that you have what it takes.
  5. Parents will be reassured when you present them with a wide range of different certifications. It will make them feel more certain about your capabilities.
  6. You should be able to command a higher salary when you have plenty of certifications. Your clients will see that you have taken the time to invest in your skills, which makes you more marketable and valuable. You can justify your salary requirements through those certifications.
  7. You are more likely to beat out other candidates for lucrative jobs when you have a broad range of certifications. When stacked up against someone who doesn’t have any certifications, you will stand out in a positive way.
  8. Certifications look great on resumes, especially when you don’t have extensive amounts of experience. You can balance out a lack of experience by obtaining plenty of high-quality certifications. As your experience increases, you will be able to command even more pay.
  9. By keeping your certifications up to date, you will be able to qualify for consistently good pay. You are more likely to get raises when you do this too. It shows parents that you have a vested interest in learning and growing.
  10. Certifications help you to keep your skills in check. It is easy to forget certain things when you don’t have to put them to work every day. In order to qualify for certification, you have to have the right knowledge and skills.

Ways to Ask for a Raise as a Nanny

  1. Conduct extensive research about salaries in your area. How does yours compare? If yours falls far short, you could bring it to the attention of your employers in a non-confrontational way. Many clients will agree that you deserve to be paid the going rate and will give you a raise.
  2. Have something extra to offer. Do you go above and beyond the call of duty on a regular basis? You don’t have to point out every last instance but provide concrete examples when asking for a raise.
  3. Highlight the special bond that you have developed with your clients’ children. Discuss the important role that you play in their lives. Make it clear that you enjoy the children’s company and consider them to be important parts of your life.
  4. Obtain new and better certifications. If your existing certifications are in danger of lapsing, renew them. Be sure to tell your employers about any courses that you are taking, and let them know when you receive new certifications. It will set the stage for a raise request.
  5. Point out the little extras that you provide to your employer. Do you take phone calls for them without being prompted? Do you take the dog out for walks sometimes without being asked? These small things could lead to a raise.
  6. When your yearly anniversary rolls around, always ask about a yearly raise. It is fairly standard to give some sort of raise around the time of a nanny’s anniversary. If it was given in the past, you should get it in subsequent years.
  7. Remember that the parents are not your bosses – they are your clients. If your rate needs to go up, they will have to pay it or find a new nanny.
  8. Keep the value of your room and board in mind if it is applicable. Keep an eye on the going rates for rentals in your area. Stay informed so that you can plead your case for a raise more effectively.
  9. As cost of living expenses rise, your salary should too. Your clients are well aware of cost-of-living increases, but they aren’t likely to offer additional compensation without being asked for it.
  10. If all else fails, tell your clients that you would love to stay on but could get higher pay elsewhere. This may be what they need to hear in order to give you a raise.

Find Out the Average Local Rate for a Nanny

  1. Speak with nannies in your area. What are they getting paid? Most people are more than willing to be perfectly upfront about this topic. For example, in Austin Texas, the average hourly pay for a Nanny is $14.77
  2. Scan the ads on sites like Craigslist. What are nannies offering in terms of hourly rates or monthly salaries? Salaries are not always listed, so feel free to send messages if necessary.
  3. Visit sites like Salary.com to see what their reports have to say about nanny salaries in your area. This is a great way to get a clear idea.
  4. Ask around on playgrounds and in other areas where parents and nannies congregate. Most people will be happy to tell you what they earn or what they pay for their nannies. This information is not usually that confidential.
  5. Check in with local nanny agencies. Find out how much their nannies typically charge. You may have to provide additional information. It’s worth it, though, because it will give you a much more specific idea about what you can expect to pay.
  6. If you are a nanny and want to make sure that you are paid fairly, be sure to keep your skills and level of experience in mind. You may qualify for more or less than the average going rate for nannies in your area.
  7. Pay attention to whether the salaries that you learn about are for live-in nannies or not. Room and board can take a huge chunk out of how much a nanny earns.
  8. Nannies who have certifications tend to make more than those who do not. This can affect the going rate for a nanny in your area.
  9. Do nannies in your area enjoy regular raises? You may start off at a rather low rate, but could earn a raise within a relatively short period of time. If you are paying a nanny, you need to know whether a raise will be expected.
  10. Nannies who do housework and other chores generally make more than those who do not. Include that point when you are asking around about the going rate in your area.

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