Whether you are a nanny or parent, when looking for a live-in nanny arrangement, salary is going to be a factor. Live-in nannies should consider their fair market value and determine their salary range prior to seeking a live-in position and parents should consider their childcare budget before advertising for a live-in provider. When both parties have an idea of their ballpark range they’ll be able to attract those who can work within the same range.
Salary
A live-in nanny’s earning potential can be dependent on many things. A nanny’s education, experience, salary history and the area she works can all significantly influence a nanny’s salary. In general, nannies in major metropolitan areas will earn more than those working in rural areas and nannies with college degrees will earn more than those who hold high school diplomas.
According to the International Nanny Association 2013 Nanny Salary and Benefits Survey, nannies earn on average, approximately $17 per hour with the mean hourly wage being $16. Since live-in nannies receive room and board as part of their compensation package, they typically earn slightly less than live-out nannies in the same area.
While parents can be found advertising for caregivers who will work in exchange for a place to live, live-in nannies are protected by the Fair Labor Standards Act and must be paid at least minimum wage for all hours worked. Live-in nannies in a few states, however, are also entitled to an overtime differential for all hours worked over 40 in a 7-day period. So while some nannies and families talk about their nanny’s wages in terms of a weekly salary, to be wage compliant, the salary must be broken down into hourly wages and the wages must be compliant with the Fair Labor Standards Act.
It is industry standard for nannies to be paid for 52 weeks per year. If a family decides that they wish to travel without their nanny or that their nanny can have time off that was not prearranged, the nanny should receive her typical wages.
Tax Obligations
Many parents are surprised to learn that live-in nanny employers have tax obligations. These obligations are equivalent to about 10% of the nanny’s annual gross salary. This includes paying the employer portion of FICA and withholding and paying the nanny’s portion, federal and state unemployment taxes where applicable. Some states may also require employers to pay additional taxes, like worker’s compensation. There are tax credits, however, that can offset this cost. Household and nanny tax specialists like HomeWork Solutions and Breedlove & Associates provide payroll and tax services to household employers.
Benefits
While employers are under no legal obligation to offer benefits, to attract and retain quality live-in nannies parents typically offer a competitive salary package. Most nannies receive two weeks paid vacation, paid holidays and paid sick days. Some nannies also receive full or partial contributions towards their health insurance policy. Live-in nannies also may have use of an employer provided vehicle.
Live-in nanny employers should contact their homeowner’s insurance agent and auto insurance agent to verify their coverage extends to the live-in nanny.
Room and Board
Live-in nannies should at minimum receive a private bedroom and private bath. In addition to their lodging, meals are also included with their salary package. The family may provide a food stipend to the nanny or include her grocery shopping with their own.
In addition to the live-in nanny’s duties and responsibilities, her salary and benefits and the exact room and board arrangements should be mutually agreed upon and drafted into a written work agreement to prevent misunderstandings and miscommunication.
10 Common Benefits Offered to Live-in Nannies
When parents offer a competitive salary package they are able to attract and retain top live-in nanny candidates. While there is no legal obligation to offer employment benefits, parents who do find that they secure and keep live-in nannies who feel valued, enjoy their work and appreciate their employers.
- Room. Live-in nannies typically are provided with at least a private bedroom and bathroom, however some live-in nannies are provided with a guest house or separate living accommodations offsite.
- Board. While meals and utilities are included, some nannies also get all of their toiletries paid for, as well as their cell phone and other living expenses.
- Paid vacation time. Live-in nannies typically receive one to two weeks of paid vacation. When two weeks are offered, typically the nanny picks one week of time she’d like off and the family picks the other.
- Paid holidays. Live-in nannies are typically paid for eight to 11 holidays off each year. Federal holidays are typically a given.
- Paid sick days. Nannies are typically provided with three to five sick days per year.
- Paid personal days. Nannies are also typically provided with one to two personal days per year.
- Contributions towards health insurance. Nannies may receive partial or full contributions towards their health insurance premiums. These contributions can be made with tax free dollars, so offering this benefit can actually save employers money and increase the nanny’s net wages.
- Use of an employer provided vehicle. Live-in nannies are often provided with a vehicle to use during working hours, however most families allow their live-in nanny to use it during off hours too.
- Professional development reimbursement. Live-in nannies may be reimbursed for professional development, including memberships to organizations like the International Nanny Association and conference expenses or trainings.
- Use of family memberships. As a member of the household, nannies may be given access to the family’s gym or health club as an employment benefit or perk.
When parents offer a strong benefits package, they are to leverage it with salary negotiations. Nannies who require health insurance, for example, may be willing to work for a slightly lower hourly rate in exchange for that employment benefit. Since employers can contribute to a nanny’s health insurance premium with pretax dollars, offering the benefit lowers the taxable wages, which can save parents money while providing the nanny with a valued benefit and even a slight increase in her take home pay. Regardless of what benefits are offered, be sure to include them in a written work agreement so that there is no misunderstanding as to what is being provided.
