You’ve decided to hire a nanny.

How much you’ll pay a nanny is something you’ll want to figure out early in the process. Not after you decide on a candidate. This way there are no surprises for either side.

Remember you’re hiring a professional to work in your home much like a small business owner hires someone for their team.

If you’re hiring through an agency, they will help you determine an appropriate offer for the type of nanny you’re seeking.

Here are the factors that will influence how much you pay a nanny:

1. Fair Labor Standards Act

Full- and part-time nannies are covered by the Fair Labor Standards Act (FLSA). They must be paid an hourly rate that is at least the federal minimum wage or the minimum wage for your state or city if it’s higher. Overtime pay of time and a half must also be paid for more than 40 hours of work per week.

2. Location

As with most jobs, nannies that live in areas that have a higher cost of living or in metropolitan areas tend to be paid more. According to the latest research by the International Nanny Association, the average hourly rate for a nanny in California is $34/hour. New York ($32/hour), Washington ($31/hour), Massachusetts ($29/hour),  Connecticut ($29/hour), and New Jersey ($28/hour) are among the states on the higher end of the pay scale.

3. Live-in or Live Out

Will your nanny be live-in or live-out? A nanny who lives in your home could be paid less because they are receiving room and board.

4. Full-time or Part-time

Are you hiring a full-time nanny? Or is it a temporary or part-time position? A full-time employee has more job security and may receive benefits that can keep their hourly rate lower than a part-time or temporary nanny.

5. Experience, Education, and Training

As with most professions, experience counts. Think about how many years of child care you would like to have in a candidate. What about certifications, formal education, or training in a child care field? The more experience, education, and training a nanny possesses, the higher their pay will be.

6. Responsibilities

What other responsibilities will your nanny have? Will they be expected to cook dinner, wash dishes, do laundry, walk the dog or pick up the kids from school? Also, will your nanny need to be on call? Will they be expected to care for your children if you’re called into work? Additional responsibilities and being on call could increase the pay rate.

7. Number of Children

The number of children the nanny will care for will impact pay. The more children, typically the higher the pay.

8. Benefits and Incentives

As you determine your nanny’s hourly rate, you may want to consider benefits and incentives for your nanny. This will also help you attract and retain the best talent. Consider paid time off, paid holidays, health insurance, and a retirement plan. Also, think about bonuses for excellent performance, annual cost of living increases, reimbursement, or increased pay for completing training or getting a degree.

9. Tax Obligations

When budgeting for your nanny’s pay, remember you have employer tax obligations on top of what you pay your nanny. GTM’s easy-to-use tax calculator will help you figure this out.

Other considerations when you pay a nanny

Gross vs. Net Pay

The tax calculator will also provide your nanny’s gross and net pay. Your nanny will be most interested in their net pay – or take-home pay. This is the amount in their paycheck after taxes – such as income tax, Medicare, and Social Security – are taken out. Their gross pay is their take-home pay plus the taxes that will be withheld. Make sure you and your candidate are clear about gross and net pay to avoid any confusion come payday.

Work Agreement

When you have agreed on compensation, put the hourly pay rate and other policies in a written work agreement.

GTM can help

What you’ll pay a nanny is one thing. How you’ll pay your nanny is another challenge. Calculating overtime and withholdings, managing paid time off, and adhering to tax and wage laws trip up many household employers. GTM helps make payday easy with automated payroll processing and free direct deposit for your nanny. We’ll also calculate, file, and remit all federal and state taxes. And that’s just the start! To learn more, ask questions, and better understand your obligations as a household employer, take advantage of a complimentary, no-obligation consultation with a household employment expert. Call (800) 929-9213 or schedule time with us at your convenience.

Hiring a nanny?

Download Your Guide to Hiring a Nanny. In this guide, we lay out the steps on how to hire a nanny the right way and maintain a strong relationship with your employee.