“Our time with Debbie was brief, but positive in every way. We originally sent her email wherein she responded that same day. We then met her at my office for an interview. She made such an impression that we invited her to have a playdate with my children, who are 2 and 6 years old. We have had nannies for our children for over 6 years and have seen the good and the bad. She was actually the first nanny we invited to meet them after having spoken to and met approximately 35 other nannies. When she arrived at our house, she immediately took an interest in the children. She was very attentive and asked questions to see how we would like her to care for our children. Following the playdate, we offered her a full-time nanny position with our family. At her first day and each day thereafter she was punctual, pleasant, couteous, professional and respectful. The children were her priority. Through no fault of her own, our prior nanny (who had been with us for 1 1/2 years) advised that she was no longer relocating (which was the reason we were looking for a nanny). After much consideration, we felt it was best for the children to be with the nanny they had known. During our brief time with Debbie, it was truly a pleasure to have her in our house and as our nanny. Please feel free to contact us with any questions. Sincerely, Stacy”
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.
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.
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.
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.
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.
Nanny wages vary across the country, depends on the amount of experience a nanny has and whether you provide housing for her.
According to the 2012 INA Nanny Salary and Benefits Survey: