Negotiating salaries- Are hourly rates net or gross?
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Anonymous
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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! |
Anonymous
| Hourly rates should be gross but many nannies want to have/know what exactly they will take home each week. $21/hr net + taxes will be A LOT. But if this is not clear, could lead to much confusion. Our nanny did this so we just came up with an hourly rate + OT and came to an agreement of net each week. However, SHE is responsible for her own taxes but it depends on if she is having them deducted or paying them quarterly herself... |
Anonymous
| PP. we also pay her premium but this is new after 3 years and Obamacare, which required health ins. She did not have it before... |
Anonymous
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Gross. Always gross. It is not your job to know/manage an employee's deductions.
We paid part, then all, of our nanny's insurance costs but those were added incrementally as raises after year 1, year 2, etc... |
Anonymous
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OP here...
Thank you. I thought what she was saying/requesting was odd. Besides being an excessive amount once gross is calculated, it seemed odd that how much I pay depends on her tax filing status and on where she lives. It's also one thing to expect an employer to gross up for FICA, but an entirely other thing to expect your employer to handle all of your income taxes on top of the salary agreed to. She just said it all with such conviction that she had me doubting my thought process. With everything combined, her "$20/hr" rate actually turns into a $26hr rate... |
Anonymous
| Yes, many nannies do try this so it is not unusual but it should always be gross. You could also just come up with a weekly amount based on the projected hours/hourly rate. If she opts to have taxes deducted, she may ask for a higher rate to ensure a specific net amount each week. And sometimes, people confuse having taxes deducted as the employer "paying." For instance, $1000 gross/week is roughly $700-750 net/week. There are tax calculators she/you can use to ensure you are both on the same page! |
Anonymous
| Always gross. You don't know what your nannys tax situation is. You do pay the employer portion of FICA on top so account for that (7% if in not mostaken). As a courtesy you can offer to take taxes out for her and then file them with hit return but you don't have to, she can do that but she needs to know she'll have to in April and save for that. In md you are not required to withhold the employee portion, but you are require to pay the employer portion. |
Anonymous
| Nanny here- I negotiated net, $22/hr which is $29/hr. How do you expect your nanny to live off $20/gross?? Could you live off $16-17/hr? |
Anonymous
| Always gross. If "nanny" can't deal with that, best to move on to a nanny who can. It's not rocket science, people. |
Anonymous
| I think she is trying to make things more complicated + expensive hoping you will get so frustrated that you will just give in and pay her off-the-books in ca$h. |
Anonymous
The nanny sleuths on this website are insane. Many, many people live off of that salary. Plus, it makes no sense to negotiate net versus gross because an employer has no ways of knowing or being responsible for your tax situation. You could very well work it to get a big fact return at the end of the year, thereby bumping up your net. There isn't any legitimate job in this world that negotiates salaries based on net. If someone is trying to do that, I would suspect their motives. |
Anonymous
Hello?? Have you heard of all those minimum wage jobs, some not even offering FT hours? How do you think they live? |
Anonymous
Sharing beds, social services. Are you that isolated that you need to ask? |
Anonymous
| 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. |
Anonymous
| PP - sorry I meant she didn't tell us to deduct her taxes. And we did end up paying part of her tax burden becaus contract vague. |