Nanny salary as a percentage our household income - gross

[Anonymous]

Not to get too detailed, but OP also needs to factor in OT.. 15/hr for 50 hours is actually 42,900. Not to mention your portion of taxes, etc... This would bring the percentage closer to 18-20%.

Just things to keep in mind-- From a nanny...

[Anonymous]

Anonymous wrote:Not to get too detailed, but OP also needs to factor in OT.. 15/hr for 50 hours is actually 42,900. Not to mention your portion of taxes, etc... This would bring the percentage closer to 18-20%.

Just things to keep in mind-- From a nanny...

Three pages and finally someone caught the over time

[Anonymous]

We make a little less than you OP most years and pay about $20K for our nanny share piece (more for preschool too). Are your kids twins? If not you may want to look at the option of using a share and having your oldest in a preschool for most of the day. This could cut your cost a bit compared to the full nanny sticker and provide your older kid the needed preschool outlet.
Re: Over time...I figured you were quoting the avg rate you planned to pay. If instead this is the base hourly rate you plan to offer then yes you need to calculate OT for any hours over 40. (It is possible to set up the contract to back into an avg rate of 15 but you then quote the calculated rates in the contract, not the avg rate. )
I do not think you posted where you are located so I find it funny that so many PPs think the rate is too low. It may be or may not be - if you are in NWDC it is probably too low big you are in Columbia it is likely good especially since you are offering 40+hours.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Not to get too detailed, but OP also needs to factor in OT.. 15/hr for 50 hours is actually 42,900. Not to mention your portion of taxes, etc... This would bring the percentage closer to 18-20%.

Just things to keep in mind-- From a nanny...

Three pages and finally someone caught the over time[/quote

Most people discuss rates as averages.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Wow. Seems like both parents who outsource the childcare, is quite the luxury that few can really afford. What happened to extended family and friends who could help you out, more as a favor?

Okay. Want to be friends with me? Oh, and would you watch my 2 year old twins for 40 hours a week for free? I'll get my cousin and her mom to cover the other 15 hours I need, and my aunt can probably bake you a loaf of bread as a thank you once or twice a month. No? Shocking.

What's shocking is that people don't have a network to help out each other.

It's not that shocking. I live 2000 miles from one set of grandparents and 500 miles from the other set. And come now, only retired grandparents have the time and desire to watch offspring for free for hours a week, all year. Getting your "network" to do so, even if it volunteered, would be unfair (unless you were doing the same for their kids in other years/part of the week/etc).

There a small communities where child care is shared, etc, but the whole labor and social system is different in those locales. It doesn't work in suburban DC or downtown Baltimore, etc.

[Anonymous]

OP, totally understand your question. My family grosses about $375k/year and we spend about $46k on a nanny, so less than the fraction you are citing.

I'm not sure percentages work since there's a lower ceiling for food, car and everything else you need that a person at a given income level is likely to be comfortable with.
If we felt we couldn't do a nanny we would likely look for a nanny share. Maybe that's a good choice for you if you feel like what you would have left after a nanny would not be enough?

As for the snarks on this list DH and I work 60 hrs / week each (much after the kids are in bd) and so do everyone in our whole family. Get real. We need professional childcare. I won't even mention that our nanny provides a safer and more enriching environment than most of the people I know (including myself) ever could. There's a reason money was invented.

[Anonymous]

Anonymous wrote:Sometimes when I see the nanny salaries discussed on this site I wonder how families afford everything.

Combined, my wife and I gross ~250K. We're looking at nannies at $15/hr for 50 hours/week which works out to 39K/year. So that's about 16% of our gross income going to childcare. Is this normal? After taxes, 401K contributions and all of our other expenses we're almost tapped out every month. How is everyone affording this. Are we just too poor to hire a nanny?

[Anonymous]

Anonymous wrote:You live on 250,000 but you think 39,000 is too much to pay a nanny who works fifty hours a week? How do you think she is surviving?

Bonus time.

[Anonymous]

The economic cost is higher than that, since nearly all of the nanny compensation is after tax (5k dependent care fsa). If your HHI is 200-250k you are paying a marginal rate of ~40% (7.65%payroll+5.75 if va+25%fed) on each dollar over 72k. That means that if you pay your nanny 42k, the cost to you is 75,355 (42k, plus 3200 in payroll taxes, plus 30k in taxes you had to pay on your income that went to the nanny) if you do your payroll yourself.

We are at 195 HHI, our nanny is 23% of our gross, but the economic cost is really 39% of our gross.

[Anonymous]

Anonymous wrote:The economic cost is higher than that, since nearly all of the nanny compensation is after tax (5k dependent care fsa). If your HHI is 200-250k you are paying a marginal rate of ~40% (7.65%payroll+5.75 if va+25%fed) on each dollar over 72k. That means that if you pay your nanny 42k, the cost to you is 75,355 (42k, plus 3200 in payroll taxes, plus 30k in taxes you had to pay on your income that went to the nanny) if you do your payroll yourself.

We are at 195 HHI, our nanny is 23% of our gross, but the economic cost is really 39% of our gross.

OMG. I'm not sure it's good for me to understand the full economic impact (!!!) but I appreciate this really full, accurate analysis.

Now I'm going to go try to forget it.

[Anonymous]

I think what matters in this calculation is your NET. What part of your takehome are you paying her? For us, we have a high household income, but we pay about 3,000 per month to student loans. Paying our nanny another 3000-3500/month (depending on overtime) is tight for us, even though the overall number of what we earn is high.

[Anonymous]

That 250 k is split between TWO WELL educated parents.

[Anonymous]

Anonymous wrote:Sometimes when I see the nanny salaries discussed on this site I wonder how families afford everything.

Combined, my wife and I gross ~250K. We're looking at nannies at $15/hr for 50 hours/week which works out to 39K/year. So that's about 16% of our gross income going to childcare. Is this normal? After taxes, 401K contributions and all of our other expenses we're almost tapped out every month. How is everyone affording this. Are we just too poor to hire a nanny?

Correct, hardly anything left over.. Consider daycare or a nanny share, both are good options and less costly.