Figuring out total cost of a nanny

[Anonymous]

If I am hiring a nanny and am doing everything above-the-board (paying taxes and overtime), what unforeseen costs will there be?

$18 per hour for the nanny up to 40 hours
$27 per hour for overtime hours
Do I pay taxes on top of this? (She will be paying income taxes out of her income.)
Fees to Breedlove (Homepay) -- How much are these?

Thank you!

[Anonymous]

Are you contributing to health insurance?
Is she using her car or yours to drive the kids around? If yours there is gas and wear and tear on yours, If hers you need to pay a set amount per mile I believe.
Food for the Nanny assuming she is eating breakfast, lunch and snacks at your house. I have known Nannies who had to provide their own but most families provide it.

[Anonymous]

Above PP again. Cost of activities for kids, classes etc

[Anonymous]

Yes, you pay the employer contribution of the taxes (social security and medicare). You should also have worker's compensation insurance. You will also have to budget for her to have paid time off and any additional childcare you'll need in her absence.

[Anonymous]

Anonymous wrote:Are you contributing to health insurance?
Is she using her car or yours to drive the kids around? If yours there is gas and wear and tear on yours, If hers you need to pay a set amount per mile I believe.
Food for the Nanny assuming she is eating breakfast, lunch and snacks at your house. I have known Nannies who had to provide their own but most families provide it.

Nobody I know provides food specifically for a live out nanny beyond simply saying she is welcome to whatever is in the house

[Anonymous]

Taxes:
7.5% employer part of FICA Taxes
Unemployment Insurance depends on your state, but about 2.5%
Worker's Comp -- varies; cheapest through Breedlove or your homeowner's policy

Bonuses:
Generally expected at birthdays and Christmas. Christmas bonus of 1 week's pay generally quoted, though many people do not give that much, and some people give a lot more.

Petty cash for activities, meals out with your child -- how much you allow for this is up to you.

If you are not providing a car, mileage reimbursement for all driving except her commute to and from your house (currently 54.5 cents/mile).

Some people provide extras like a health insurance stipend or continuing ed stipend.

Guaranteed hours:
You pay for 52 weeks a year, even if you do not need her.

Temp coverage:
Someone to cover nanny's vacation and sick days, or plan to spend your own PTO on those days.

HomePay comes to about $1000/yr. You can also do it yourself for free.

I always tell people to budget about 12-15% of the nanny's pay for other costs. Nanny care is expensive, and being a good employer makes it more expensive. My #1 tip for new nanny employers is to make your peace with it being expensive. Do not try to save $100 here and there by using the law to your advantage (no OT pay on holiday weeks, for example), or cheaping out on bonuses, or questioning every dollar the nanny spends when out with your child, even if it adds up to a substantial amount of money by the end of the year.

[Anonymous]

Anonymous wrote:If I am hiring a nanny and am doing everything above-the-board (paying taxes and overtime), what unforeseen costs will there be?

$18 per hour for the nanny up to 40 hours
$27 per hour for overtime hours
Do I pay taxes on top of this? (She will be paying income taxes out of her income.)
Fees to Breedlove (Homepay) -- How much are these?

Thank you!

If you are paying nanny $18/hr that will cost you $19.50/hr with taxes and she will net $17/hr depending on her hhi.

[Anonymous]

Anonymous wrote:Taxes:
7.5% employer part of FICA Taxes
Unemployment Insurance depends on your state, but about 2.5%
Worker's Comp -- varies; cheapest through Breedlove or your homeowner's policy

Bonuses:
Generally expected at birthdays and Christmas. Christmas bonus of 1 week's pay generally quoted, though many people do not give that much, and some people give a lot more.

Petty cash for activities, meals out with your child -- how much you allow for this is up to you.

If you are not providing a car, mileage reimbursement for all driving except her commute to and from your house (currently 54.5 cents/mile).

Some people provide extras like a health insurance stipend or continuing ed stipend.

Guaranteed hours:
You pay for 52 weeks a year, even if you do not need her.

Temp coverage:
Someone to cover nanny's vacation and sick days, or plan to spend your own PTO on those days.

HomePay comes to about $1000/yr. You can also do it yourself for free.

I always tell people to budget about 12-15% of the nanny's pay for other costs. Nanny care is expensive, and being a good employer makes it more expensive. My #1 tip for new nanny employers is to make your peace with it being expensive. Do not try to save $100 here and there by using the law to your advantage (no OT pay on holiday weeks, for example), or cheaping out on bonuses, or questioning every dollar the nanny spends when out with your child, even if it adds up to a substantial amount of money by the end of the year.

This pp covered it well. We are in a nanny share. We give our nanny about $100 per month for petty cash and the other family gives about the same. We are in DC so no driving but our nanny metros to activities. We have annual memberships at the building museum and pay monthly membership at another club for kids. We pay for CPR training. We give Christmas bonuses, birthday bonus and another random gift for nanny day or something like that. Our nanny gets 12 vacation days a year and 5 sick days. What that means is that we are usually paying for backup care/nanny maybe 10 days a year. At approx. $100 a day that adds another $1000. Our nanny stays an hour later than her usual 9.5 hours once a week to allow me to take my oldest to swimming. On those days we order food for her dinner and send her home with uber. I think that's about everything. We also pay 10 hours overtime weekly and will be contributing $150 a month toward insurance starting in january (the other family will pay 150 and the nanny will pay 150 pretax).

[Anonymous]

hi- we are in a part-time share and pay the nanny about $590/bi weekly. When you add in federal and DC taxes and all the homepay fees it gets to about $1600/mo on average... the taxes are deducted by homepay as separate auto-withdrawals on a quarterly basis.

[Anonymous]

wondering how much you give for health insurance stipend? thanks

[Anonymous]

Anonymous wrote:wondering how much you give for health insurance stipend? thanks

I gave $200 to start; later it became $300.

[Anonymous]

Don't forget to factor in what you're paying your accountant for quarterly tax filings and annual W-2s.

We calculated our nanny cost us $50k a year, all in.

[Anonymous]

Anonymous wrote:Taxes:
7.5% employer part of FICA Taxes
Unemployment Insurance depends on your state, but about 2.5%
Worker's Comp -- varies; cheapest through Breedlove or your homeowner's policy

Bonuses:
Generally expected at birthdays and Christmas. Christmas bonus of 1 week's pay generally quoted, though many people do not give that much, and some people give a lot more.

Petty cash for activities, meals out with your child -- how much you allow for this is up to you.

If you are not providing a car, mileage reimbursement for all driving except her commute to and from your house (currently 54.5 cents/mile).

Some people provide extras like a health insurance stipend or continuing ed stipend.

Guaranteed hours:
You pay for 52 weeks a year, even if you do not need her.

Temp coverage:
Someone to cover nanny's vacation and sick days, or plan to spend your own PTO on those days.

HomePay comes to about $1000/yr. You can also do it yourself for free.

I always tell people to budget about 12-15% of the nanny's pay for other costs. Nanny care is expensive, and being a good employer makes it more expensive. My #1 tip for new nanny employers is to make your peace with it being expensive. Do not try to save $100 here and there by using the law to your advantage (no OT pay on holiday weeks, for example), or cheaping out on bonuses, or questioning every dollar the nanny spends when out with your child, even if it adds up to a substantial amount of money by the end of the year.

This makes no sense. Either I'm paying her a salary, fine, it's the same every week holiday or no -- and there's no need for an overtime rate -- or, she makes an hourly rate and we therefore pay overtime on standard weeks when she works more than 40 hours but would certainly not pay overtime on vacation/holidays. I have hourly business employees and I do not pay them an overtime rate until they have *worked* more than 40 hours in a week. Holidays do not come with overtime.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Taxes:
7.5% employer part of FICA Taxes
Unemployment Insurance depends on your state, but about 2.5%
Worker's Comp -- varies; cheapest through Breedlove or your homeowner's policy

Bonuses:
Generally expected at birthdays and Christmas. Christmas bonus of 1 week's pay generally quoted, though many people do not give that much, and some people give a lot more.

Petty cash for activities, meals out with your child -- how much you allow for this is up to you.

If you are not providing a car, mileage reimbursement for all driving except her commute to and from your house (currently 54.5 cents/mile).

Some people provide extras like a health insurance stipend or continuing ed stipend.

Guaranteed hours:
You pay for 52 weeks a year, even if you do not need her.

Temp coverage:
Someone to cover nanny's vacation and sick days, or plan to spend your own PTO on those days.

HomePay comes to about $1000/yr. You can also do it yourself for free.

I always tell people to budget about 12-15% of the nanny's pay for other costs. Nanny care is expensive, and being a good employer makes it more expensive. My #1 tip for new nanny employers is to make your peace with it being expensive. Do not try to save $100 here and there by using the law to your advantage (no OT pay on holiday weeks, for example), or cheaping out on bonuses, or questioning every dollar the nanny spends when out with your child, even if it adds up to a substantial amount of money by the end of the year.

This makes no sense. Either I'm paying her a salary, fine, it's the same every week holiday or no -- and there's no need for an overtime rate -- or, she makes an hourly rate and we therefore pay overtime on standard weeks when she works more than 40 hours but would certainly not pay overtime on vacation/holidays. I have hourly business employees and I do not pay them an overtime rate until they have *worked* more than 40 hours in a week. Holidays do not come with overtime.

Federal regulations state that employees can work up to 48 hours without OT during holiday weeks. If you try to nickel and dime by decreasing payroll during weeks with federal holidays, or when nanny takes vacation, you won’t keep a nanny very long.