How to Negotiate Your Nanny’s Pay and Still Get the Best Person for the Job

One of the hardest parts of hiring a nanny could be negotiating a pay rate. You want the best caregiver you can find at a reasonable rate. And that shouldn’t be an issue if you approach this negotiation as a conversation and not a conflict. It’s not a matter of one side winning or losing. Seek common ground, understand each other’s needs, and come to a shared solution. Both sides come out satisfied, which is a great start to your professional relationship!

Your nanny will be working in your home and caring for your children. You’ll want them to feel valued and respected while at the same time you remain financially responsible.

With the proper preparation and mindset, negotiating pay with your nanny will be just like a conversation. Here are some tips on how to negotiate your nanny’s pay.

Understand your local market

The going rates for nannies vary from city to city. Even going from a metropolitan area to its suburbs can see a big change in pay for caregivers. It’s important to know what nannies get paid in your city or town. A good resource is the International Nanny Association (INA)’s Nanny Salary and Benefits Survey. If you’re working with a placement agency, they will help you set a good rate of pay for the nanny you want. You could check online job sites to see what rates are offered by families seeking help. However, the wages offered on these sites are often far too low to attract a high-quality, professional caregiver.

Here are some other factors to consider when budgeting for a nanny.

Use a nanny tax calculator

You’ll have other expenses on top of your nanny’s pay including payroll and unemployment taxes. These can be offset if you have a Dependent Care Flexible Spending Account through your employer and the Child and Dependent Care Tax Credit. By using a nanny tax calculator, you’ll get a complete picture of your financial obligation. That way your pay rate is one you can afford and you know the most you can offer before turning away a candidate.

Always treat your candidates with respect

A high-quality nanny is not going to be interested in a job with a family that doesn’t respect them. That includes pay negotiations. There is no need to be condescending, demeaning or confrontational. Treat your candidates as the professionals they are. You’re at the start of a relationship with someone who will be working in your home and caring for your children. It’s an important hire and you want the best possible candidates for the position.

Negotiate an hourly, gross pay rate

Nannies are required by law to be paid an hourly rate and not a flat salary. You could offer guaranteed hours, which is like a salary in that your nanny can rely on a steady pay amount each week. Many nannies prefer guaranteed hours as it helps them budget and pay their bills.

Gross pay is your nanny’s hourly rate before taxes and other deductions. Your nanny can also use a nanny tax calculator to enter their personal tax information and determine their net or “take home” pay.

Remember overtime is time and a half

Nannies are also required by law to be paid at least time and a half for hours worked over 40 in a workweek. If you’re offering your candidate $20/hour for 50 hours/week, that’s $20/hour for the first 40 hours and $30/hour for the additional ten hours. Nannies may like a job that offers overtime as it allows them to build up their pay.

Live-in nannies typically do not need to be paid overtime, but state laws vary. For example, in New York, live-in household employees get overtime for hours worked over 44 in a workweek.

Pay “on the books”

There’s too much financial and legal risk involved for your family to take the chance and pay your nanny “under the table.” So paying illegally should be a non-starter. The top nannies understand this and will only take jobs that pay “on the books.” They want to be treated like professionals and enjoy the benefits of legal pay like having an employment history and verified income when they apply for credit, loan or mortgage.

Offer benefits

Pay rate is not the only consideration for a nanny when deciding whether to take a position. You could consider including health benefit options to help your nanny reduce the costs of their health insurance. Many plans are funded pre-tax so you’re both saving money by reducing your nanny’s taxable income.

While some level of paid time off is standard, you could also be generous with vacation time and sick days. That could be attractive to a nanny even if your rate of pay is a little low.

Know employment laws in your state

Some states are making it illegal for employers to ask about a candidate’s salary history. Make sure you understand the applicable labor laws in your state. Remember, as a family hiring someone to work in your home, you are considered an employer and these labor laws may apply to you.

Agree to an evaluation period

Let’s say you have an applicant you are fond of and they would like to work for you. But you’re a little bit apart on a rate of pay. You could ask your candidate to work for a few months at the lower rate and then agree to revisit their wages at the end of this “introductory” or “trial” period. You would need to put this in writing and when the time comes determine whether your nanny is worth paying more to keep them on board or ending the relationship and re-starting your job search.

Make a fair offer

It may be tempting to low ball your candidate and then plan to negotiate that rate. But offering a low pay rate (without benefits to make up for it) could be a turn off to a high-quality, professional nanny. They may just say “no” and move on to a family that respects their work.

Do your research and make a reasonable offer. You can negotiate higher but always stay within your budget. Offering a fair pay and benefits package will also make your candidate feel validated. If they think you value their work, that gives them even more of an incentive to do a good job. You’re also building trust in your employee and that doesn’t come with a price tag.

Put it in writing

Once you’ve agreed to a rate of pay and benefits package, make sure it’s documented in your work agreement. Your employee’s hourly rate, overtime rate, paid time off, and other wage and benefit details should be clearly stated so there’s no confusion come payday.

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