How to Set Up a Nanny Share

A nanny share is a great way for a family to enjoy the benefits of personalized care from a nanny while sharing the costs with another family.

Here is how to set up a nanny share that benefits both families, their children, and the nanny.

What is a Nanny Share?

Let’s start with the basics. In a typical nanny share, two (sometimes more) families hire one nanny to care for their children. The nanny usually cares for all the children in one of the family’s homes. Sometimes the location is rotated between the families involved in the nanny share.

Benefits of a Nanny Share

A nanny share helps make in-home child care affordable for many families. Each family in the nanny share pays a portion of the nanny’s hourly rate rather than her full rate if you were hiring on your own. You’ll receive more personalized care – as opposed to a daycare – in the comfort of your home and/or your nanny share family’s home. Your child won’t be exposed to as many illnesses that other children frequently bring into a daycare. That means you don’t lose as much work time because you need to be home with a sick kid. Plus, a nanny share provides some socialization for your child with your nanny share family’s children that they would have received in daycare and may have missed if cared for on their own at your home.

Find the Right Family for Your Nanny Share

The first step in setting up a successful nanny share is finding the right family for the partnership. There are a number of ways to find families who would like to do a nanny share including local parenting groups, nanny agencies, word-of-mouth, referrals from friends and colleagues, and online parenting message boards. But not just any family will make your nanny share work. Here are some things to look for when joining another family for a nanny share.

You share a similar outlook on parenting

This includes discipline, activities, diet, vaccinations, nap schedule, and more. It’s unrealistic to find a family that exactly matches your parenting style, but you’ll want enough commonalities, so the nanny can be consistent in how she cares for your children.

You genuinely like the other family

You’ll be spending a lot of time, especially in the beginning, communicating and working closely with the other family. Make sure you get along. Ideally, your nanny share could last several years depending on the age of your children.

Your children get along with the other family’s kids

While you’re determining whether you can get along with the other family, allow the children to spend some time together. Watch how they interact. They’ll be spending a lot of time with each other. Make sure there are no serious red flags such as one child being physical or abusive with another.

Your children are a similar age

There are several reasons why you would want your children to be about the same age as the other family’s kids. Some of it is logistical as you and your nanny share family can “age out” of having a nanny at the same time. If one family’s children are older, they may leave the nanny share before the other, and now that family is stuck with the full cost of a nanny. Also, with children of a similar age, it’s easier for the nanny to schedule activities, prepare meals, and coordinate nap times. From a child-rearing perspective, your nanny share family’s children may be the primary source of socialization for your kids and they can progress together (learning, reading, walking, potty training, etc.).

The other parents get along with each other

Do the other parents interact well with each other? Do they show respect towards one another? How do they communicate? If the parents don’t get along, some of their issues may impact your relationship with them.

Location of the nanny share

Where does the other family live? If you need to drop off and pick up your children, is it easy to do given your commute and traffic? Does the other family live near parks or places where the nanny can take the children outside? Is it easy to get to a library or other activities (sports practices, music lessons, etc.) if your nanny will be walking or driving the children places?

How many families will be in the nanny share

A nanny share is typically two families but can be more. However, adding more families to a nanny share can make the arrangement more complicated and difficult to manage.

Find the Right Nanny for Your Nanny Share

Once you have found a family for a nanny share, it’s time to find a nanny. Be upfront that you are seeking a caregiver for a nanny share. You’ll want to find a nanny who has experience working for a nanny share, can care for multiple children, and is comfortable with having more than one employer. She should also be on the same page with your parenting styles and expectations. Your nanny’s communication and organization skills will be even more important as she will be handling two different families.

Determining an Hourly Wage

Part of the attraction of a nanny share for a family is that it reduces the costs of in-home child care as two (or more) families are paying the nanny’s wages. This is also attractive for a nanny as she can earn more money in a nanny share than she can work for a single family. Each family pays typically two-thirds of a nanny’s hourly rate based on what you would pay on your own.

For example, a nanny in your area makes $20/hour working for a single family. Then you and your nanny share family would each pay about $13-14/hour for a total of $26-28/hour. Just make sure you are paying at least minimum wage, which is the highest of the federal, state, or local rate. You are also required to pay your nanny time and a half for hours worked over 40 in a week.

Understand Taxes, Payroll, and Insurance in a Nanny Share

In a nanny share, both families are considered employers by the IRS. That means both families must obtain federal employer identification numbers (EIN) and register with the state. Each family pays Social Security and Medicare (FICA) taxes as well as federal and state unemployment taxes.

At the end of the year, each family will issue Form W-2 to the nanny and file Schedule H with their own personal tax return. Families can also take advantage of the Child and Dependent Care Credit and/or their employer’s Flexible Spending Account (FSA) to offset the cost of their nanny’s wages.

For more details on how to manage nanny taxes and payroll, follow our Nanny Tax Guide. GTM Payroll Services also offers free, no-obligation consultations for families entering a nanny share. Call (800) 929-9213 to speak with a household employment expert and get answers to all your nanny share questions.

Purchase Workers’ Compensation Insurance

If workers’ compensation insurance is required by state law, then both families must purchase a policy. Workers’ comp will help cover part of your nanny’s medical bills and lost wages if she gets hurt or sick while on the job. Even if coverage is voluntary, a policy may make sense and is often affordable. In a couple of states, like California and New Jersey, you may be able to add workers’ comp to your homeowner’s insurance policy. Not having the required coverage can be one of the costly mistakes household employers make. In New York, for instance, the fine is $2,000 for every 10 days of non-compliance.

Put together a Nanny Share Work Agreement

After finding a family and a nanny, the work agreement is probably the next most important piece of a successful nanny share. This document will spell out everything for the families and your nanny. You should discuss most of these details with your nanny during the hiring process and come to an agreement on these points. A work agreement simply puts these items in writing to be signed by all parties.

You’ll want to include:

Schedule

Where will the nanny work? At one family’s home or rotate between homes? What hours is the nanny expected to work? Will the hours be the same for both families? Also, is this a temporary job with a set end date?

Wages

Detail the nanny’s hourly rate as well as her overtime rate. Will both families pay the same rate?

Pay Day

How will the nanny be paid? Will each family write a check for the net amount (gross pay less taxes and any other deductions) of their portion of the nanny share? Will you set up direct deposit? Or use a payroll service? When and how often will the nanny be paid? Some states like New York require domestic employees to be paid every week.

Job Responsibilities

Be specific with your expectations. This way your nanny is not caught off guard with any special requests. Remember you’re hiring a child care professional and not a housekeeper or chef. If you want to add cleaning or cooking family dinner to your nanny’s job responsibilities, expect to pay more.

Benefits, Paid Time Off (PTO), and Sick Leave

Will you offer health insurance or a retirement plan? How much time off will the nanny receive? Will you put restrictions on her time off? For example, will you require her to use some of her PTO when you go on vacation? How many sick days will she receive? Some states specify a minimum number of sick days for domestic employees.

Learn more about what to include in a work agreement and how to create one.

Don’t Underestimate the Importance of Communication

This goes for family-to-family communication as well as families-to-nanny communication. If there is an issue, the nanny share families need to discuss it first and come to an agreement. Then that response should be shared together with the nanny. That will help eliminate confusion and keep a clear channel of communication with your nanny. You should talk every day with your nanny either at drop-off, pick up, or both. Mention anything new that’s going on with your child. Your nanny should let you know what they did during the day, highlights, and any concerns. Often, pick-up and drop-off times can be rushed. Have your nanny keep a daily log that you can take home and review in a calmer moment.

Talk with the other family on a regular basis and discuss how the nanny share is going. Are everyone’s needs being met? What are the concerns? Any issues with the nanny? Any foreseeable changes that could impact the arrangement?

You probably want to set up a shared calendar with the families and nanny. Not only for where the children will be cared for that week (if rotating homes) but also for any appointments, lessons, vacation time, and more that all parties need to be aware of.

Be Fair and Flexible

While you save on childcare costs by being in a nanny share, you also need to be flexible knowing that there is another family involved in the caregiving. You may need to coordinate vacations and paid time off with the other family so you’re both away at the same time.

Before moving forward, discuss how to pay for items like diapers, strollers, food, activities, and other expenses. What happens if one of the families decides to leave the nanny share? How much notice should be given? What if the nanny quits? How will both families move forward with childcare?

A nanny share offers plenty of benefits for families and their children. To fully realize these advantages, families must put in the time and effort to set it up correctly, show flexibility, and communicate to make a nanny share work for all parties.