Negotiating salaries- Are hourly rates net or gross?

[Anonymous]

Anonymous wrote:If your nanny insists on negotiating on net wages, and you really want to hire her, then a condition of employment should be that at the end of the year, she will provide a copy of her tax return and turn over any refund to you.

This is terrible advice.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If your nanny insists on negotiating on net wages, and you really want to hire her, then a condition of employment should be that at the end of the year, she will provide a copy of her tax return and turn over any refund to you.

This is terrible advice.

Why's that? She negotiated a rate that assumes she is compensated for all taxes. If she gets money back, or is lying about how much her taxes actually are, then she nets far more than the family agreed to. She owes them that money.

Yet another reason why no one should pay based on net.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If your nanny insists on negotiating on net wages, and you really want to hire her, then a condition of employment should be that at the end of the year, she will provide a copy of her tax return and turn over any refund to you.

This is terrible advice.

Why's that? She negotiated a rate that assumes she is compensated for all taxes. If she gets money back, or is lying about how much her taxes actually are, then she nets far more than the family agreed to. She owes them that money.

Yet another reason why no one should pay based on net.

Exactly my point. Don't negotiate net, period. It would be even more careless to negotiate net with an hourly worker who doesn't make much money, with the expectation that she would give some of it back to you at tax time. That strategy would be setting up the employment relationship for drama.

[Anonymous]

If she wants a "net"; just calculate the gross and agree to that amount.

[Anonymous]

$29/hour is crazy. That's more than many teachers and cops and firefighters get paid.

[Anonymous]

Always hourly defined as hourly by IRS so nannies and domestic workers are paid every hour they work and can collect overtime.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If your nanny insists on negotiating on net wages, and you really want to hire her, then a condition of employment should be that at the end of the year, she will provide a copy of her tax return and turn over any refund to you.

This is terrible advice.

Why's that? She negotiated a rate that assumes she is compensated for all taxes. If she gets money back, or is lying about how much her taxes actually are, then she nets far more than the family agreed to. She owes them that money.

Yet another reason why no one should pay based on net.

NP here. This is against the law. Explain how taxes work and show her what you expect her net to be based on her deductions. Or move along to someone who has a better understanding of employer employee relationships. Do not negotiate in net.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Agree that you should work from a gross that works with your family's budget, and find a nanny for whom that is acceptable.

http://info.homeworksolutions.com/blog/i-agreed-to-pay-our-nanny-600-take-home-weekly-a-case-study

Thank you for sharing. This happens all the time. We agreed to $700/week net and learned the hard way that this was really about $975/week. Not out of the norm for this area but a big shock. I do find most nannies want an agreed upon net take home, however, so you have to make sure you have a good understanding of taxes.

It's really ignorant for employers to get into "net" discussions. Why do you engage in that nonsense? You're leaving your children with these people??

I don't know any nanny --and I have been hiring nannies for over 10 years-- that does not want some guaranteed amount per week, hours, etc.

That is not the same! Yes, i want guarantees hours and you want guarantees availability. That has nothing to do with the tax system.

[Anonymous]

Anonymous wrote:Our nanny negotiates net, but just for the ss/Medicare that come off the top. She fills our income tax form out as exempt so that nothing additional is deducted and then is responsible for paying income taxes herself. We know she actually files her tax return, but I don't know the specifics (honestly, it' unlikely she's exempt, but it's technically possible and she may not owe enough to owe a fine).

You pay her so little that she may not need to pay any federal taxes?!?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Our nanny negotiates net, but just for the ss/Medicare that come off the top. She fills our income tax form out as exempt so that nothing additional is deducted and then is responsible for paying income taxes herself. We know she actually files her tax return, but I don't know the specifics (honestly, it' unlikely she's exempt, but it's technically possible and she may not owe enough to owe a fine).

You pay her so little that she may not need to pay any federal taxes?!?

If she has a bunch of kids, it might be possible, even on a decent nanny salary.

[Anonymous]

Anonymous wrote:In everyone's experience, if a nanny'S rate is "$21/hr", is that net or gross?

I found this nanny that we like but she is negotiating as net, saying all taxes (employee and employer) should be paid by us on top of her $21/hr "take home pay". This seems crazy to me and pretty backwards. But it has me wondering- are all the nannies I've been interviewing who say that their asking rate is )20 or $21 per hour, talking about net or gross? I've never heard of someone negotiating net so this seems odd to me.

This nanny is also asking for insurance contributions on top of everything? Is that typical?

Thanks!

Youre dealing with a dumbass. If a nanny does not know how standard pay works, then move along. She's not as smart ad my 10yr old who even understands this concept.

Of course you talk gross.

[Anonymous]

Anonymous wrote:Always GROSS. Don't listen to nannies on the site - always inflating wages. However, make sure it's clear. We hired a nanny and said we pay all taxes, which we thought meant employer and she don't say to deduct her taxes. At the end of the year, she told us we owed her close to $4k that she owes the IRS when she filed taxes!!!! Big mess.

Yes, you must be clear when it comes to taxes. If you told a nanny that you would "pay all taxes", unless she is a professional and experienced nanny, she might very well think that includes her portion of employment taxes as well as her income taxes. A professional and experienced nanny would have asked for clarification.

[Anonymous]

Anonymous wrote:Our nanny negotiates net, but just for the ss/Medicare that come off the top. She fills our income tax form out as exempt so that nothing additional is deducted and then is responsible for paying income taxes herself. We know she actually files her tax return, but I don't know the specifics (honestly, it' unlikely she's exempt, but it's technically possible and she may not owe enough to owe a fine).

I wouldn't agree to this either. Social Security and Medicare taxes will go up and that will be an automatic raise for her. Raises should be negotiated separately.

[Anonymous]

Anonymous wrote:In everyone's experience, if a nanny'S rate is "$21/hr", is that net or gross?

I found this nanny that we like but she is negotiating as net, saying all taxes (employee and employer) should be paid by us on top of her $21/hr "take home pay". This seems crazy to me and pretty backwards. But it has me wondering- are all the nannies I've been interviewing who say that their asking rate is )20 or $21 per hour, talking about net or gross? I've never heard of someone negotiating net so this seems odd to me.

This nanny is also asking for insurance contributions on top of everything? Is that typical?

Thanks!

she's nuts. $21/hour net would be like 4 kids or a 25 hour week part-time job.

So many nannies overplay their cards and wonder why they are jobless for such long stints...

So yes, it's typical for some nannies to ask for the work and expect an iterative negotiation. But, for most busy American parents that's a big, big turnoff to start at such a large disconnect. And the requests will just keep coming, every couple months. Yuck.

[Anonymous]

Anonymous wrote:In everyone's experience, if a nanny'S rate is "$21/hr", is that net or gross?

I found this nanny that we like but she is negotiating as net, saying all taxes (employee and employer) should be paid by us on top of her $21/hr "take home pay". This seems crazy to me and pretty backwards. But it has me wondering- are all the nannies I've been interviewing who say that their asking rate is )20 or $21 per hour, talking about net or gross? I've never heard of someone negotiating net so this seems odd to me.

This nanny is also asking for insurance contributions on top of everything? Is that typical?

Thanks!

Should be gross. Not your responsibility to figure out net. Also, this is a very high rate unless there are four kids.