What Does a Live-In Nanny Cost?
Learn what the rate for a live-in nanny is and if you can afford it. The answers may surprise you.
Many families think that hiring a live-in nanny is out of the question. After all, having someone live in your house is bound to be more expensive than having a nanny who reports to your home for 40 hours a week, right? Maybe not.
If your family is struggling with needing more flexibility than a live-out nanny can offer, you might find hiring a live-in nanny is just as manageable financially.
What's Cheaper: Live-Out Nanny or Live-In Nanny?
Technically, says Lindsay Heller, also known as The Nanny Doctor, live-in and live-out nannies should receive the same rate. Because you're paying for the same services, the pay should not be different -- but it often is.
In reality, many live-in nannies generally make slightly less per hour than a live-out nanny, says Becky Kavanagh, co-president of the International Nanny Association (INA) and former live-in nanny. That's because they live in your home, so you absorb the costs of room and board.
But if you already have an extra room (and, preferably, a bathroom as well), the room and board costs to you won't be much. And one extra person to feed will up your grocery bills only slightly. Generally, a live-in nanny will also pay for some of her own food (especially if it's something your family doesn't typically have on hand).
What Should You Pay a Live-In Nanny?
As with any salary, ranges differ based on region, says Kavanagh.
According to the INA's 2017 Salary and Benefits Survey, the national average hourly rate for a full-time nanny is $19.14 per hour with no significant difference between live-out and live-in employment.
And the level of a nanny's education influences her earning potential as well. The INA reported that the financial benefits of having two years of college education can equal more than $1 per hour extra in their hourly rate.
Just like education, experience is also important. For every year of experience as a nanny, the pay rate will also increase. A nanny with 4-5 years under her belt can make more than $3 per hour more than a novice nanny.
Above all, keep in mind that live-in nannies must be paid at least a minimum wage (find out the rate in your state). This rule is the same for live-out nannies too, but it's particularly easy to think that a live-in caregiver who works so many hours in your home can be paid at a lower rate.
What Additional Nanny Expenses Are Involved?
When you hire a nanny, don't forget about the extra costs that can crop up -- make sure you factor them into your budget. Things like an annual yearly bonus (a median of $600, according to the INA), yearly raises, food costs, insurance, memberships, gas reimbursement, etc. Figure out what you will be paying for, whether you will provide a stipend or reimburse your nanny for any expenses and include the details in your contract.
Learn about How to Create a Nanny Contract.
What Are Live-In Nanny Work Hours?
"Families sometimes think they have a nanny on call for all hours of the day," says Heller. "If you need that, you need to pay them more or you are exploiting them. Live-in nannies should have scheduled hours and that should be respected."
You need to pay your nanny for every hour she's on duty. And remember that "on duty" doesn't only mean she's actively engaging with the kids, but rather she needs to be in your home and isn't free to come and go as she pleases (for example if you ask her to watch your kids overnight while you're on a business trip).
A typical live-out nanny is paid hourly for 40 hours a week -- anything over that must be paid at an overtime rate. On the other hand, most live-in nannies are exempt from overtime (the exceptions are for nannies working in California, Hawaii, Massachusetts, Maryland, Maine, Minnesota, New Jersey, New York and Oregon).
Do You Pay Live-In Nanny Taxes?
The short answer: yes. If you pay someone more than $2,100 a year, you're required to pay taxes. But paying these taxes provide important short and long-term benefits to your nanny as well as enable you to take advantage of tax breaks to lower your tax liability. Learn All About the Nanny Tax.
If the idea of being in charge of payroll and taxes makes you uneasy, find a service that can do that for you. Care.com HomePay can take care of your nanny's payroll and taxes, so you don't have to worry about filing deadlines and deducting the correct amounts.
If you plan to hire a live-in nanny and make the investment of time and effort to get the right person, you should be willing to pay her a decent rate. In a job with high burnout, says Heller, a live-in who feels valued and appreciated for her hard work is more likely to stay for the long haul.
Julia Quinn-Szcesuil is an award-winning freelance writer and a mom to two girls. She lives in Massachusetts and has written for local and national publications.