Hiring a nanny to come into your home and care for your little ones is a big decision.
The individual attention and care your kids will receive with a nanny really can’t be beat. But remember, hiring a nanny automatically makes you an employer, whether you’d like to assume that role or not. As such, you’ll find yourself suddenly thinking about things like payroll, taxes, and contracts. Yikes! Another thing you may not have considered yet? Benefits.
What You Need to Know about Nanny Benefits
Before you hire a nanny, it’s wise to sit down and outline what, if any, benefits you’re willing to offer her.
Of course, you’re not obligated to offer a nanny any benefits at all, but doing so is a great way to maintain a positive working relationship that’s beneficial for both parties.
So what benefits might a potential nanny be looking for?
We did some research and found that nannies across the United States are seeing an incredibly wide range of nanny benefits (or lack thereof, in some cases). It seems that while some nannies are sailing the Mediterranean on yachts and regularly staying in five-star hotels, others are lucky to receive an hourly wage with no paid sick leave. And geography doesn’t seem to be much of a factor; wealthy areas, like New York and LA, experience the same ranges as more conservatively priced regions.
Despite this, there are some benefits that most nannies agree make their lives much better and their jobs that much more fulfilling. Let’s take a look at a few so you can decide which benefits to offer your nanny.
Paid time off/holiday pay
Paying a salary that includes a few holidays each year and one to two weeks of paid time off is a great way to attract a nanny who’s likely to stay with you for the long haul. This type of arrangement gives your nanny increased flexibility over an hourly arrangement, where she’s not making money if she needs a day off here and there. When it comes to vacation time, most families choose one of the weeks off and allow the nanny a week of her choice.
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This one goes along with the first benefit. Let’s face it—people get sick. It’s just a fact of life, and you certainly don’t want your nanny passing germs to your kids if they’re healthy! So consider building a few days of sick leave into your nanny’s contract. It’ll be far less stressful for her, and she’ll appreciate you for it.
While you certainly don’t have to shoulder the entire financial burden of your nanny’s health insurance, it’s also not fair for her to have no coverage at all simply by virtue of her career choice. If this is something you’d like to provide for your nanny, look into some private plans and contribute a certain amount monthly. And bonus!—your contribution is tax deductible.
Speaking of taxes, you’ll have to decide whether or not to handle your nanny’s taxes as well. We use the term “decide” rather loosely here, since the IRS requires that you pay Social Security and Medicare taxes on your nanny’s income. On top of that, you’ll have to decide whether to withhold a portion of the nanny’s pay to put toward taxes, or have her handle her own taxes at the end of the year.
As outlined in this article from the New York Times, paying a nanny or another household employee on the books can quickly get pretty complicated, but it’s worth it to avoid the potential fines and penalties associated with skirting the IRS.
Similar to most full-time employees, the annual bonus is every nanny’s dream, and for good reason—who wouldn’t want to have a little extra cash at the end of the year? While you can choose to splurge on a gift for your nanny, like an iPad or an expensive purse she’s been eyeing, cash is always a safe bet. Most employers who choose to give their nanny an annual bonus typically offer one to two week’s salary.
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Christin Perry is a freelance writer and editor living in the DC area. She specializes in the lifestyle genre and her writing has been published by The Knot, The Bump, and LittleThings.com.
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