What is the total yearly cost of employing a nanny?

[Anonymous]

There are a dozens of threads on the going hourly rate for a nanny, but I’m interested in the total all-in cost for your family every year — base rate, overtime, employer taxes, workers comp coverage, payroll service fee, mileage reimbursement, health insurance stipend, etc. (What other common expenses am I missing?)

How much does it really cost for you to employ a full-time, year-round nanny who makes $25-$35/hour (or less or more)?

[Anonymous]

[quote=Anonymous]There are a dozens of threads on the going hourly rate for a nanny, but I’m interested in the total all-in cost for your family every year — base rate, overtime, employer taxes, workers comp coverage, payroll service fee, mileage reimbursement, health insurance stipend, etc. (What other common expenses am I missing?)

How much does it really cost for you to employ a full-time, year-round nanny who makes $25-$35/hour (or less or more)?[/quote]

65,000

[Anonymous]

We were closer to $72,000 for a $25/hr base rate at 45-50 hrs/week.

[Anonymous]

Anonymous wrote:We were closer to $72,000 for a $25/hr base rate at 45-50 hrs/week.

Are you paying a higher rate for OT?

[Anonymous]

$70-80k is a good estimate.

Let's go with the middle and say $30hr for 40 Horus per week.

Annual base bay is $62,400
$6300 (10%) for employer taxes
$1500/yr for tax/payroll service and workers comp policy

Variable costs:
-All hours over 40 in a week have to be paid at time and a half (legally under the Fair Labor Standards Act)
-Mileage reimbursement in nanny is using their personal vehicle for work
-Many candidates will be seeking a monthly health insurance stipend. Average for that is $250/month and it's tax free for both nanny and family
-Money for outings, classes, and activities

Standard benefits:
-Guaranteed hours
-2 weeks paid vacation
-5 sick days
-paid holidays
-potential health insurance stipend

(I run a nanny agency and have a nanny for my kids)

[Anonymous]

We’re at $60k per year roughly

[Anonymous]

We paid about $45K, though I did not go through a nanny placement agency which is why it was cheaper. We also only had roughly 32 hrs per week, as I WFH full time.

[Anonymous]

For us, we have found that it's worked out consistently to be the rate per hour times 200 to get the monthly costs. That's how we budget.

Currently, we pay $26 an hour for our own nanny, it's $5,200 a month or just over $62k a year.

That includes her salary, taxes, workers comp, and the payroll company. This is for 40 hours a week, so no overtime. Our nanny walks the kids everywhere (we live in the city) so there's no milage, and as of yet, we haven't had a nanny who wanted a health insurance stipend. Our nanny also doesn't do things that cost money (Gymboree or whatever) but if you did that, it'd be extra as well.

[Anonymous]

I think we were at about $65k total, including the taxes we pay the IRS as an employer.

She used our car so we don’t have a mileage reimbursement.

We didn’t do overtime - we have babysitters for date nights and such.

[Anonymous]

Anonymous wrote:I think we were at about $65k total, including the taxes we pay the IRS as an employer.

She used our car so we don’t have a mileage reimbursement.

We didn’t do overtime - we have babysitters for date nights and such.

Oh and one more thing. That was $65k of my post-tax salary. I had a very small
FSA (I think $3k?) and because our HHI is so high (a good problem to have!) we don’t qualify for childcare tax credits (or else the credit is really small - I’d have to look at our tax return). So, you can’t just think, ok, my salary is $100k and nanny gets $65k of that. It’s basically, my entire salary goes to the nanny + the IRS for my income taxes. Hope that makes sense!

[Anonymous]

We do about $35K for a nanny share (one other family), 45 hours a week.

[Anonymous]

We’re approximately 45k, including holiday bonus. (Maybe only an hour of overtime every 3 weeks), we pay 1.5x for any time outside of 9-5pm requested, even if she does not work 40 hours that week.

[Anonymous]

OP here. Thanks, all. This has been very helpful. We are thinking of going the nanny route and want to make sure we are above-board and the care provider is competitively compensated. I am glad I asked for real life numbers because there is so much more to account for than simply multiplying the base rate by 40.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We were closer to $72,000 for a $25/hr base rate at 45-50 hrs/week.

Are you paying a higher rate for OT?

Yes, fully on the books including all taxes and overtime pay at 1.5x.

[Anonymous]

Anonymous wrote:OP here. Thanks, all. This has been very helpful. We are thinking of going the nanny route and want to make sure we are above-board and the care provider is competitively compensated. I am glad I asked for real life numbers because there is so much more to account for than simply multiplying the base rate by 40.

I'm the nanny agency poster above and forgot to include that most families offer 1 weeks pay for Christmas bonus, prorated the first year depending on how long the nanny has been employed.