Benefits For Full-Time Nannies
Full-time nannies can expect to receive some benefits along with their standard weekly or hourly nanny pay rates. For both live-in and live-out full-time nannies, benefits can include two weeks of paid vacation per year, paid days off during major holidays and health insurance. Live-in nannies get the additional benefit of room and board, including their own room and sometimes a private bath, as well. Some nannies get use of a car and a cell phone, too. These benefits typically apply to nannies who work 40 hours or more a week. Some nannies can work up to 60 hours a week. In exchange for hours in excess of 40 hours a week, nannies get paid overtime or paid time off to compensate them.
Nannies: Employees or Independent Contractor Status?
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 Taxes: The Breakdown
Figuring out the tax requirements in your nanny’s pay doesn’t have to be complicated once you break down the amounts by category. If your nanny is an employee, you’ll usually withhold anywhere from 15 percent to 20 percent of her pay in taxes. Here are all the components you need to be concerned about when it comes to nanny taxes.
- Half of the Social Security and Medicare
- Federal Income tax
- State Income tax (in some cases)
When it comes to Social Security and Medicare, you only need to take out nanny taxes during each pay period. If you and your nanny decide to do so, you can withhold federal income taxes on her paycheck.
Overtime Pay For Nannies
If your nanny works overtime, you should plan on compensating her for her time. Nannies who work more than 40 hours within a 7-day workweek must get overtime pay, according to the federal government. You should plan on paying overtime pay for nannies at a compensation rate of 1.5 times your nanny’s hourly wage. Overtime pay for nannies can be built into the salaries. 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 as many hours as you and she agree upon. Although nannies who are live-in often get paid less, they do have the right to get pay equal to that of a live-out nanny.
Paying Taxes With A Nanny 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. One such agency, GTM Household Employment Experts, handles payroll and paying taxes specifically for nannies and their employers.
The Statistics Behind Nanny Compensation
Wondering what the typical salary is for a nanny? Nanny compensation varies widely, depending on the amount of experience a nanny has, whether you provide housing for her and what area you live in. According to the International Nanny Association, live-in nannies who are just starting out in the profession may make from $250 to $400 a week. Live-in nannies with training can make from $400 to $1,000 a week.
The International Nanny Association 2006 Salary Survey breaks down the figures a little more clearly in a survey of over 1000 nannies. The survey included a broad spectrum of professionals from full-time nannies to infant specialists. Respondents may have had as little as a year of experience or over eight years of experience. Of the nannies that responded, 45 percent had some college education. This summary of the earnings breakdowns can act as a nanny salary guide and give an idea of the varied nanny compensation possibilities that live-in and part-time nannies can get.
- 9 percent cited earnings of $300 per week
- 8 percent cited earnings of $500 per week
- 5 percent cited earnings of $650 per week
- 3 percent cited earnings of $750 per week
- 3 percent cited earnings of $1,000 per week
