Nanny’s Compensation for Use of Her Car
Insurance Deductible
Professional Car Insurance
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Although many employers provide a car for their nanny to use during work hours, others ask their nanny to use her own car for work-related duties. This is more common outside major metropolitan areas, in small cities and towns.
Before you choose this option, make sure you consider all the implications of using your own car for work. Do you drive a car that is safe? Do you perform the regular maintenance needed to keep the car in good working order? Do you carry adequate insurance? Are you able to financially cover any major expenses that may come up? Are you financially preparing for the purchase of a new(er) car when needed? If not, what will happen when you can no longer provide safe, reliable transportation? All these issues should be discussed before hire and outlined in your nanny / family work agreement.
Nanny’s Compensation for Use of Her Car
A nanny should be compensated for gas used, regular wear and tear (depreciation), and any additional insurance she must carry to cover her increased liability. She can be compensated in one of two ways. First, an employer can pay a straight amount per mile. This amounts includes ALL costs, including gas, associated with the use of her car. The current IRS amount is 48.5 cents per mile.
Second, an employer can pay for the individual costs associated with a nanny using her own car for work. These costs can include gas reimbursement, mileage allowance for depreciation, and contribution towards maintenance and repairs.
Insurance Deductible
Even if a nanny is using her own car, an employer is generally responsible for the deductible if the nanny is involved in an accident during working hours. If she is involved in an accident on her personal time, she is responsible for the deductible.
Professional Car Insurance
Often, the personal insurance policy that a nanny carries on her vehicle WILL NOT cover the use of her car for work purposes. If she is involved in an accident, her insurance carrier can refuse to cover the accident. If you use your car for work and your policy does not cover business driving, professional coverage can be purchased as a rider to the existing policy. Generally, the employer pays for the additional cost.
