Articles & Guides
What can we help you find?

Reimbursing Your Nanny for Gas and Mileage

Reimbursing Your Nanny for Gas and Mileage

The process of hiring a nanny can involve quite a bit of logistical and financial detail. Agreeing on a protocol for driving is just one example of the many arrangements that need to be sorted out. Will they drive the children to and from school, to play dates or for day trips?

If your nanny will use your car while caring for your children, she should be compensated for gas and any other expenses such tolls. When your nanny uses her own car, she should be reimbursed for gas, tolls and any wear and tear on the vehicle. Paying for her commute is completely up to you.

How does a busy mom arrange for reimbursing driving costs? We’ve detailed some options to consider below – choose the one you think best fits your situation.

Set a Flat Rate

If your nanny drives a consistent number of miles to transport your children, this option makes things a little easier. But since you’ll just be estimating what expenses your nanny will incur when using her car, be sure to communicate with her to confirm that you aren’t underpaying (or overpaying) her.

Use the Standard Mileage Rate

The Canada Revenue Agency issues a standard mileage rate to calculate the cost of gas, maintenance and depreciation of a car used for business purposes (like running errands for families or transporting kids). The rate for 2014 is 54 ¢ per kilometre.

Using this average mileage rate is helpful because it covers all of the expenses that your nanny could incur from using her car.

But for this to work, your nanny needs to keep track of the miles she drives in order for you to use this rate. You can have her create an online spreadsheet that you both can refer to, using a program like Google Drive. Track the days she works and the miles she drove each day. When pay day comes, it will be easy to figure out how much you owe her. This method will also help keep track of her hours in case you owe her overtime.

Pay Per Job

For part-time nannies, per job reimbursement is more fitting. If your nanny periodically drives your kids or doesn’t follow a set weekly schedule of covering the kids’ transportation, it makes sense to compensate her each time she uses her car. It’s a perfect way to give your nanny her reimbursement in a timely manner so that she’s immediately repaid for the transportation expenses.

Reimburse Per Paycheck

Repayment of gas and mileage with each paycheck is more common with full-time nannies that regularly help with driving your kids. Whether you choose to use the standard mileage rate or a flat rate, including it with each paycheck makes it easy for you and your nanny. The regularity of both the paycheck and the transportation reimbursement keeps everything on schedule.

Driving Costs Included in the Salary

Some families simply choose to give their nannies a raise to cover the extra driving expenses. It’s an easy solution, but the problem with this method is that both you and your nanny then have to pay taxes on the extra wages. Do the math, but it may end up costing you more.

Discuss these options with your nanny and agree on a system that works for everyone. Make sure you include the details in your nanny contract.