Your compensation package is an important factor in attracting and retaining a high quality caregiver. Not only is a nanny looking at what you’re offering in relation to what it will bring her personally, she in looking at your compensation package as a reflection of your commitment to quality care.
Gross vs Net
Base Salary / Hourly Wage
Overtime
Raises Overview
Anniversary Raise
Performance Raise
Baby Raise
Annual Bonus Overview
Anniversary Bonus
Performance Bonus
Difference between Bonus and Holiday Gift
24-Hour Care Pay
Travel Pay
Expenses While Traveling
Interviewing Costs
Relocation Costs
Household Accounts
Return to Parent FAQ Index
Gross vs Net
When talking with a prospective nanny about the hourly wage or salary you’re offering, make sure you both are using the same terminology. Many nannies negotiate based on what they’ll bring home (take home wages) rather than what they’ll be paid (gross wages) so it’s important that you make it clear what your figure represents.
Base Salary / Hourly Wage
When considering a job, salary or hourly wage is an important factor to nannies but it isn’t the only factor. Nannies look at a variety of factors during their job search. If you find yourself on the low end of your area’s wage range, explore other things you can do or offer to make your position more attractive. Many nannies accept salaries below their “market value” because they connect with the family or they’re attracted to the other benefits offered.
Unfortunately, there are no cut and dry rules for determining salary or hourly rate. The most important factor is location. If you or time taken off for are making them part of their benefit packageling babysitting, you can actually relax and enjoy your ticompare two identical positions, one in Short Hills, NJ and the other in St. Louis, MO, you’ll find they can offer very different compensation packages and attract the same type of high quality caregiver. The only exception to this rule is the salary for executive positions. These positions offer a high-end salary and benefit package regardless of location.
The best way to determine the pay range for your particular location is to ask as many people as possible what the going rate is for the type of caregiver you want to hire. Local placement agencies, nanny support group, resource and referral agency, neighborhood caregivers, friends and colleagues are all great sources of information.
Although there is no typical base salary or hourly wage, there are factors that affect wages in typical ways. When developing your wage range, start by determining what things are important to you and what things you can be flexible on. The more factors you require (e.g. education, experience), the higher wage you can expect to pay.
Location Unfortunately, unless you’re able to move, this factor is out of your control. If you live in an area where nanny wages tend to be above average, you will most likely have to pay in that range to attract and keep a quality caregiver.
Level 1 (highest) NYC
Level 2 bedroom communities that serve NYC plus Boston and Seattle
Level 3 major cities on the East Coast such as Philadelphia and Washington D.C., major cities on the West Coast such as Los Angeles, San Francisco
Level 4 major cities not on East or West Coast such as Chicago and Dallas
Level 5 (lowest) smaller cities and towns
Experience This factor weighs heavily in determining wages. The more experienced a nanny is, the higher wage she can command. However, don’t assume that experience equals quality care. It doesn’t. Regardless of how long a candidate has been a nanny, she should be interviewed and referenced thoroughly.
References References count a lot in this profession. All nannies should have great references. However, a nanny with a portfolio full of stellar references can command an above average wage.
Age Nannies between the ages of 25 and 45 are generally the most sought after so they are in a higher wage range.
Education While a degree pushes a nanny’s wage up, it does so only slightly if the nanny doesn’t have hands-on in-home care experience. However, a child-related degree combined with nanny experience automatically puts a nanny in a higher wage range.
Stay-at-Home Parent If you are hiring an entry-level nanny, being a stay-at-home parent doesn’t factor into the nanny’s wage. However, if you are hiring an experienced nanny being a stay-at-home parent generally raises the nanny’s wage requirement. How much depends on the individual nanny.
Responsibilities If you require the typical child-related duties (e.g. children’s laundry, meals, transportation) responsibilities don’t impact wages. However, if you add family- or household-related duties (e.g. family meals, family laundry), the nanny’s wages will go up accordingly.
Living Space For most live-in nannies, living space factors into the wages they require for a particular job. With all other things being equal, smaller, less private space will increase the wage requirement while more spacious, private space can actually decrease the required salary or hourly wage.
Overtime
A nanny sets her overtime rate in one of two ways. First, as a factor of her salary. Generally one and a half to two times her regular rate. This is almost always more than you’d pay a neighborhood babysitter because the nanny is charging for nanny services, not babysitting. Second, a nanny may charge the going rate for high quality babysitting in her area ($10 to $25/hour depending upon your location). This is usually the rate the nanny charges other families she babysits for in her off time. Many employers find their nanny’s overtime rate high but remember, your nanny is probably working a 50 to 60 hour work week already so her rate reflects the value she places on her off time.
Danger! Coming home 20 minutes late in the evening, leaving 15 minutes early in the morning, that time is overtime. Even if your nanny is flexible about her daily schedule and adjusts her regular hours to meet your needs, she should still be compensated for the time she works.
Raises Overview
It is standard within the industry for a nanny to receive an annual raise. A raise, like most benefits, can be used as a hiring incentive as well as motivation to stay in a position long-term. Some families base their raise solely on the nanny’s performance while others offer both an anniversary raise and a performance raise. How you structure your raise is a matter of personal preference.
Anniversary Raise
An anniversary raise (often called a cost-of-living raise) is a guaranteed amount that goes into effect upon completion of a year. Some employer’s base it on the cost-of-living figures provided by the government or their employer, usually between 1.5 and 5 %. Others choose a set dollar amount such as $15 or $30 per week.
Performance Raise
A performance raise is based on how well a nanny handles the different aspects of her job including childcare, child- and family-related tasks, and her role in the nanny / family relationship. Most families offer a performance raise of 5 to 15% of the nanny’s base salary or hourly wage, depending upon their available financial resources.
Baby Raise
A new baby raise is generally 10% to 20% of the base salary or hourly wage, depending upon the nanny’s current wage and how much the new baby will impact her schedule and responsibilities.
The baby raise should be discussed as soon as you are comfortable telling people you are pregnant. If you and your nanny cannot agree on an acceptable raise or if your nanny is not comfortable working with a newborn / infant (yes, that does happen) you’ll have plenty of time to find a new caregiver.
Once the amount of the raise is agreed upon, it can take effect at a time that reflects your particular situation. If you’ll be staying home and taking primary care of the baby, it can go into effect when you return to work. If you’ll be hiring a nursery nurse, it can go into effect when she leaves. Or if your nanny will be sharing responsibility for the baby with you or a nurse, part of the raise can go into effect when the baby comes home and the rest when you return to work or the nurse leaves. Remember to update your nanny / family work agreement to reflect the new salary or hourly rate as well as the updated schedule and additional responsibilities.
Danger! Many employers go through an entire pregnancy without discussing a baby raise, assuming it will be worked out once the baby arrives, once the mom goes back to work, once everything settles down. The problem with this approach is that it leaves the nanny in the dark, often to assume her employers are not going to offer her a raise or that they don’t value her input into what is a fair amount.
Annual Bonus Overview
It is standard within the industry for a nanny to receive an annual bonus. A bonus, like most benefits, can be used as a hiring incentive as well as motivation to stay in a position long-term. Many employers offer an annual bonus that includes an anniversary bonus and a performance bonus. This gives greater leeway in setting the amount and also offers the nanny a financial reward for going “above and beyond”.
Danger! For a nanny that feels dissatisfaction within the employment relationship, the annual bonus contributes (sometimes quite a bit) to her decision making process. It can make her feel better about her job (“Well, they come home late without calling but they did give me a great bonus.”) or make the decision to quit easier (“All those nights they walked in late and they didn’t even give me a bonus!”). A bonus is not a cure all for a troubled nanny / family relationship, but lack of one can be the straw that breaks the camel’s back.
Anniversary Bonus
An anniversary bonus is a guaranteed amount that is paid upon completion of a year. There is no set formula for determining the amount of this bonus. Most employers begin with one to two weeks salary. Generally, a larger amount is given each year representing a tangible reward for long-term employment.
Performance Bonus
If your nanny receives an above average performance review, we encourage you to give her a performance based bonus. The amount of the bonus depends on how well she has done her job and the financial resources of your family. For families living on a tight budget, that could mean a $100 bonus check enclosed in a thank-you note. For other families, that could mean $4,000 added to her anniversary bonus.
Danger! The performance bonus is much more than a financial reward. It is a reflection of how much a family values their nanny. Most nannies do not judge a performance bonus by the actual dollar amount. Rather, by the dollar amount in relation to the family’s resources. A $250 bonus from a family that cuts coupons and cleans their own house means a great deal. A $250 bonus from a family that spends $300 on take-out and a bottle of wine every Friday night is an insult.
Difference between Bonus and Holiday Gift
A bonus is a factor of the professional relationship you have with your nanny. It is a reflection of how you view your nanny as a caregiver. A holiday gift is a factor of the personal relationship you have with your nanny. It is a reflection of how you view her as a person, as a friend. Nannies that have a primarily professional relationship with their employers don’t expect a large gift (if any gift) from them. However, they do appreciate a gift (hand-made or picked out by) from the child.
Brownie Points If you do give your nanny a holiday gift, strongly consider giving her a small gift from your child and then a gift certificate as your gift to her. So many times nannies receive very expensive gifts from their employers that don’t match their needs or tastes. They truly appreciate the thought but don’t enjoy the gift as the employer intended.
24-Hour Care Pay
When you travel out-of-town and leaves your child at home with a nanny for extended periods of time, the nanny is generally paid per 24-hour period rather than per hour. There is no standard formula for arriving at this 24-hour rate. If the caregiver is not your regular nanny, you can expect to pay between $200 to $400 a day depending on the area you live in, the number of children you have and the referral source. If the caregiver is your regular nanny, you can expect to pay between $75 and $300 a day.
Danger! If a nanny is responsible for a child 24 hours a day, she should be paid for the full 24 hours. Employers that pay less than a competitive rate because, “for a live-in nanny, it’s really like spending an evening at home” or “once our daughter is in bed, the nanny really isn’t working”, aren’t being realistic about their expectations. If their child woke up in the middle of the night or if there was an emergency, they would expect the nanny to handle the situation. In turn, nannies expect to be paid for all hours on duty, not just those spent providing hands-on childcare.
Travel Pay
Families that need considerably more coverage when they travel or families that normally have multiple caregivers but are only traveling with one often offer travel pay while away from the primary residence. Paying a flat rate is usually much easier than keeping track of overtime hours. This rate is based on the nanny’s base salary, the amount of expected overtime and any additional responsibilities the nanny takes on while traveling.
Danger! An employer that feels taking her nanny on vacation is compensation enough for the travel period doesn’t understand the nature of the job. Going on vacation with an employer is not a vacation for the nanny. In fact, it is almost always more stressful and difficult than working at home. Armed with a flexible attitude and positive outlook, a nanny can truly enjoy traveling with her employers. But it is still work and she should be paid accordingly.
Brownie Points A nanny on vacation with her employers is often working without many of the standard benefits she receives at home like private accommodations or her own transportation and taking on more than her typical responsibilities. Giving her some extra time off to explore and enjoy the area’s offerings is an easy and inexpensive way to say thank you .
Expenses While Traveling
When traveling with a nanny, employers are responsible for all travel expenses including transportation, lodging, and food plus all entertainment and activity costs incurred while caring for the child.
Danger! Even if the nanny is not eating with the family, the employer should still provide the nanny with all meals while traveling. An employer that expects her nanny to cover the cost of off-duty meals is forcing the nanny to carry an unfair financial burden. Many nannies are on a tight budget and simply cannot afford to eat out several times throughout a vacation, especially since most hotels and resorts inflate the cost for even basic meals.
Interviewing Costs
All interviewing costs are the responsibility of the prospective employer. This includes airfare, train fare, car rental, gas, tolls, parking and hotel accommodations. Major expenses (e.g. airline tickets, car rentals, hotels) should be paid for in advance. Smaller expenses (e.g. gas, tolls, parking) should be reimbursed the day of the interview. If you are interviewing a local candidate and not sure of the exact amount of her costs, guesstimate the amount (train fare, gas, tolls, parking, etc.) and simply provide her with that amount. The message behind the gesture (I’m a considerate employer that takes your needs into consideration) is much more important than the actual amount.
Danger! Nannies will often pay for a rental car or train ticket up front when a prospective employer says she will reimburse the costs at the interview. However, nannies have a very hard time asking for reimbursement; instead they will wait for the prospective employer to raise the issue. If the employer doesn’t take the lead, the nanny will often take the loss rather than bring up the issue herself. However, she will leave the interview with a very negative impression of the family.
Relocation Costs
An employer is responsible for reasonable relocation costs when hiring a live-in nanny. That includes the costs involved in transporting the nanny and her personal belongings to her new home. For long distance moves, employers generally purchase an airline ticket for the nanny. For local moves, employers generally make the family van or SUV available or rent a U-Haul or Ryder moving van for the day. More experienced nannies will often require an additional relocation allowance for a long distance move. This can include the cost of airfare plus shipping charges for her belongings or the cost of a one-way rental van and the associated travel costs such as gas, hotel, etc. Be sure to discuss the issue in your final interview and outline the details in your work agreement.
Some agencies ask an employer to “advance” the nanny an airline ticket. Once the nanny starts work, the employer then deducts a set amount from the her check each week to pay for the ticket. At the end of the employment relationship, the employer is responsible for providing the nanny with return airfare to her hometown. We, and the overwhelming majority of the nanny community, oppose this policy. If you are working with an agency that supports this policy, we suggest you carefully examine their commitment to the caregivers they place and to the longevity of their placements.
Brownie Points If your nanny is moving things that require 2 people (e.g. computer, bookcase), offer to help or hire a local mover for a few hours. You can usually find inexpensive help in the community newspaper or Penny Saver.
Household Accounts
Almost every nanny will need access to a household at one time or another. She might run out of milk or diapers, want to take your child out to lunch or purchase art supplies for a new project. An employer can set up a household account in many different ways. She can 1) set up a petty cash fund, 2) provide a credit card, 3) provide a household checking account with an associated ATM / debit card or 4) provide reimbursement for child-and household-related expenses. Many nannies are not comfortable with reimbursement because expenses can add up quickly and there can be a considerable lag time between spending the money and being reimbursed. Whatever method you use, the details of your household account should be outlined in your nanny / family work agreement including any restrictions on the account. Remember to discuss your spending expectations with your nanny before she starts work. Many times nannies and employers have different ideas about what is appropriate and this issue can become a problem if not discussed beforehand.
