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How much does a nanny cost?

Oct. 26, 2018
The Nanny Guide: How Much Does a Nanny Cost?
Image via Getty Images/Guido Mieth

If you’ve narrowed down your choice of child care options and decided that hiring a nanny is the right option for your family, you’re probably wondering: Can we even afford a nanny? As with any child care option a parent considers, it’s crucial to know up front what it’s going to cost so you can look at your budget and plan accordingly.

The overall cost of hiring a nanny has many variables. The cost will depend a lot on where you live, what the nanny is hired to do and how much experience she brings to the position. You can find average rates for nannies, depending on location and number of children, with our Cost of Child Care Calculator. But you should also keep these factors in mind:

Geographic area

One of the biggest factors in how much you’ll pay for a nanny is where you live. Hourly rates for nannies vary widely from one community to the next. Those living in areas with a higher cost of living generally pay more for nanny services than in lower-priced areas. Competition can also be a factor. Cities with fewer experienced, well-qualified nannies will pay them more than in places where competition isn’t quite so fierce.

According to our 2018 Cost of Care survey, East Coast states like Maryland, New Jersey and Connecticut are among the most affordable places to hire a nanny, whereas southern states like Mississippi and Arkansas are among the least affordable. But rates can vary widely within states and even zip codes. In Houston, for example, nannies caring for a single infant downtown make an average of $100 more per week — or roughly $5,000 more per year — than those caring for a single infant in the adjacent Museum District neighborhood.

Read next: What does a live-in nanny cost?

Beyond cost of living, commuting can also play a role, says Emily Dills, CEO of Seattle Nanny Network.

For instance, if the nanny has to commute, Dills says, “The nanny will be taking into consideration the cost of her time in transit and mileage, especially if the hours are part-time.”

To find out what the going rate for nannies are in your community, check out the Cost of Child Care calculator.

Types of duties and tasks

In addition to where you live, what you’re asking the nanny to do could also affect how much you’ll pay. Caring for more children, for example, usually means more work for the nanny, and therefore, a higher pay rate.

The specific tasks included in the job description of a nanny can change from one family to the next, says Los Angeles parent coach and nanny matchmaker Stella Reid.

“[Hiring a nanny] is about making a family's life easier,” Reid says. That can mean “things like party organization, grocery shopping, organizing, planning schedules — it can be a lot of hats for one person.”

Circumstances that might make the price of nanny services go up or down include:

  • Number of children

  • Ages of children

  • Driving to and from activities — typically covered in the form of using a household vehicle or paying the nanny a mileage reimbursement if they have to use their own car

  • Household tasks, such as cooking, laundry, cleaning or dog-walking

  • Errands like grocery shopping or picking up the dry cleaning

  • Managing contractors or other household employees

  • Event planning

How much more a nanny should earn for these non-child-care tasks is between the family and the nanny, Reid says, and it should be something that’s discussed during routine pay assessments and written down in a nanny contract or workers agreement.  

For those at a loss for what would be appropriate, however, Gabriela Gerhart, founder and president of Motherhood Center in Houston, said in a prior interview with Care.com that it’s fairly standard to tack on a dollar or so to the hourly rate for common household tasks like meals or laundry for the whole family.

Experience and background of the nanny

If families are looking for someone with a lot of training or background in a specific area, they should be prepared to pay more for that experience.

“Nannies with a bachelor and master's degree, especially related to early childhood education, typically have a higher earning potential,” says Michelle LaRowe, managing partner and executive director for Morningside Nannies in Houston. Nannies with specialized training or experience with niche circumstances, such as caring for multiples or children with special needs, also earn more.

Extra costs not included in nanny pay rates

How much you pay your nanny is only part of the equation. When you’re budgeting for nanny services, you should also take into consideration other costs, like nanny taxes, background checks, and supplemental care when your nanny is sick or on vacation. These additional expenses include:

  • Nanny taxes: According to the Internal Revenue Service, nannies (full-time or not) are employees — not independent contractors — meaning families are responsible for not only withholding state and federal taxes for the nanny, but also covering the costs of taxes typically paid by other kinds of employers. These “nanny taxes” kick in when the nanny makes more than $2,100 in a calendar year, and how much they are varies by location. If you aren’t sure how much nanny taxes are in your state, this calculator can give you an idea of what you’ll need to pay. Note: These taxes apply even if you hired your nanny through an intermediary, like a service or website.

  • Payroll services: Some families opt to use a payroll service or accountant to manage the nanny’s paycheck and nanny taxes, which can also be an added cost.

  • Intermediary agencies: If you hire a nanny through a referral agency or nanny service, these organizations will generally charge fees to vet and recommend nannies for you.   

  • Periodic background checks: Background checks for nannies prior to hiring them on, as well as on an annual or routine basis, are also an added cost. Typically, the more in-depth the background check, the higher the fee.

  • Additional certifications: Families insisting that their nannies be up-to-date on CPR and first aid certifications will often pay for them to be renewed every few years.

  • Raises, bonuses and overtime: Like many different types of employees, nannies expect to receive routine raises and/or bonuses and are entitled to overtime pay (time and a half) if they work more than 40 hours per week, according to the U.S. Department of Labor. How much you should give in raises or bonuses is between you and your nanny, but LaRowe says a 2-3 percent cost-of-living raise, in addition to a 5-7 percent merit increase, is fairly standard.

  • Supplemental child care: Many families choose to give their nannies paid sick leave or vacation days. During that time, families might need to pay for supplemental, short-term child care, such as an emergency babysitter or drop-in child care, if family members are unable to fill in.  

How much a nanny costs can differ widely from one family to the next, based on circumstances, expectations and experience levels. Families interested in hiring a nanny should start by looking into the costs of nannies in their area and taxes for their state and adjust their budget from there.

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