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What Should I Pay My Nanny? The Ins and Outs of Nanny Compensation

Updated on April 29, 2016
How do you figure out how to adequately compensate someone for caring for the most precious thing to you - your kids?
How do you figure out how to adequately compensate someone for caring for the most precious thing to you - your kids? | Source

If you're hiring a nanny for the first time, figuring out an adequate salary offer is a daunting task. You want to pay enough to ensure you're getting high quality care, but not so much that you're putting every penny you make into your childcare account. How do you put a price on your children's care and safety? How do you know if you're underpaying? Overpaying? Why isn't there a magical formula to tell you what's just right?

You may be inclined to start figuring this out by asking your friends who employ nannies. Or you might not - it can be awkward talking to your friends about money! Precisely because there's no magical formula for calculating your nanny's pay, your friends may feel just as clueless as you and be embarrassed to share their rate, for fear they are over- or under-paying their nanny. Or they may not want you to know how much - or how little - they can afford to pay.

Having worked as a nanny for years, I've experienced many salary offers and pay negotiations. While I can attest that even on the nanny's side of the negotiation, there's no magical formula, here are some points you should take into account when you're determining what to offer your caregiver.

The going rate for childcare varies highly across the country. Make sure you know what sitters and nannies in your area expect to make.
The going rate for childcare varies highly across the country. Make sure you know what sitters and nannies in your area expect to make. | Source

First things first: What's the going rate in your area?

The first thing to do is look at what the average rate of pay for childcare is in your area. The absolute best tool I've found for this is care.com's Babysitter Base Pay Calculator. It allows you to enter your zip code, number of children, and years of experience of your nanny to determine the going rate for babysitting. For example, you could find out that in South Berwick, ME, a babysitter for 3 kids with 6-9 years experience should expect to get about $14.50 an hour, but that same babysitter would only expect $12.50 an hour to watch 3 kids in Brookfield, WI.

The rate you find here won't necessarily translate directly from babysitting (which is the term usually used to describe occasional or part-time, short-term care) to nannying (which usually refers to regular, long-term, full- or part-time care), but it's a good ballpark number to start with.

If you want to find out more of a range of what families in your area are paying, try browsing through babysitter-wanted ads on craigslist, care.com, or sittercity to see what others are offering. Keep in mind that just because a family is asking for a nanny at a certain rate, doesn't mean they will actually find a nanny at that rate, so take lower-than-normal numbers with a grain of salt.

What other tasks, besides child care, will your nanny be responsible for performing? Keep this in mind when determining her pay rate.
What other tasks, besides child care, will your nanny be responsible for performing? Keep this in mind when determining her pay rate. | Source

Things to Consider: Your Family's Needs

After you've gotten an idea of the going rate for care in your area, you'll want to consider other factors related to your family's needs that may influence what you should offer to pay your nanny.

Live-in or Live-out? If you're searching for a live-in nanny, part of the compensation package will be her room and board, so the hourly rate you calculated above will probably be higher than the rate you actually pay your nanny. Think about the expenses she will save on by living in your home - rent, utilities, and, if she won't have access to a private kitchen but will eat with the family, meals - and assuming you are providing her with decent accommodations, you can subtract some portion of this from the base rate in your area. But don't subtract too much - keep in mind that subtracting the market rent on a one-bedroom apartment in your area if you're only offering a room or suite in your home isn't fair. Try to imagine what she'd pay for a comparable space.

Full-time or Part-time? If you're hiring a part-time nanny, chances are she is not using the income as her sole or primary source of financial support. But if you're hiring a nanny full-time, she probably is. Make sure that the wage you're planning on paying her is a reasonable amount to live off of in your area - meaning she'll be able to afford rent, utilities, food, and other necessary expenses.

Hours and Overtime Pay If you're going to pay your nanny hourly, make sure you figure out how many hours you'll be expecting her to work each week and keep in mind that legally, you are expected to pay her overtime pay for hours worked over 40 each week. If you're going to pay her a weekly salary, divide the weekly amount by the hours she'll be working to see if the corresponding hourly rate seems fair (and legal! Make sure it's above your state's minimum wage.) You should also figure out an hourly rate to pay her for hours worked above her usual scheduled time.

Transportation: If your nanny will be driving kids to and from activities, do you have a vehicle she can use or do you expect her to use her own? If she's driving her own car, it's a good idea to pay for the gas she uses while on the job, or reimburse her for the miles she drives with the kids. Remember that gas is expensive, and she's incurring wear and tear on her vehicle as well. If you live in a city and your nanny will need to take public transportation with the kids, you should cover this expense as well.

Additional Duties: What do you expect your nanny to do while she's on the job? Playing with the kids, helping with homework, giving them snacks and meals, taking them to activities, picking up after them or helping them clean up, and ensuring their overall safety and happiness are duties that a nanny expects to be part of her job. Do you also expect her to cook for the family? Grocery shop or run errands? Do laundry or other household chores? Most nannies will be willing to do these things, if they feel they are being compensated fairly for their labor. If you are going to include these or other additional duties in your job description, consider bumping the pay rate up a bit.

Things to Consider: Your Nanny's Needs

While you won't know these things about prospective nannies until you start interviewing, there are several factors relating to the nanny you hire that may influence what you pay her.

Experience and Credentials: You may have already taken into account a general level of experience in calculating your base pay, but if your nanny has a lot of experience or particular credentials, you may want to bump the rate up a bit to acknowledge this. Some examples of when you might raise the pay for a highly-experienced nanny include:

  • If you have a child with special needs and want a nanny with extra training in this area
  • If your nanny has a masters degree in a related field with extra student loans to go along with her extra expertise
  • If your nanny belongs to professional associations or has professional certifications in childcare.

Additionally, if you find a great nanny who doesn't have any certifications, you might offer to pay for her to get them - especially CPR and First Aid Certifications. They don't cost much and may prove to be a priceless investment.

Health Insurance: Especially if you are hiring a full-time nanny, you might want to consider paying for all or part of your nanny's health insurance if she doesn't already have insurance through a spouse or family member. Find out if you can add a live-in or live-out nanny to your family's health insurance policy, and if not, you and/or your nanny can discuss options and pricing on insurance. Even offering to pay a small percentage of the cost shows your nanny that you are committed to her as a valued part of your household.

When you settle on a number, do it in the form of a range of what you're willing to pay (hourly or weekly) depending on the nanny's credentials. This will also leave you wiggle room for negotiation
When you settle on a number, do it in the form of a range of what you're willing to pay (hourly or weekly) depending on the nanny's credentials. This will also leave you wiggle room for negotiation

Settling on a Number, Making an Offer

In the end, of course, your own budget will play perhaps the largest factor in determining what you offer to pay your nanny. Be honest with yourself about what kind of care you need, what you can realistically afford, and where you might be willing or able to make compromises on your "ideal nanny" list. When you're giving your salary offer to a potential nanny, tell her what you've taken into consideration when arriving at this number - she'll be glad to see you've considered her needs as well as your family's. And be ready to negotiate - if a nanny you love hesitates when she hears your salary offer, ask her what's causing her to. It may be that all you need to do is tweak something small to make her feel good about accepting the position with your family.

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    • profile image

      Cerise 2 years ago

      Pavillion Agency is great for this kind of stuff. They are family owned and have been around for decades:

      http://www.pavillionagency.com/for-clients/family-...

    • Kate Spenser profile image
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      Kate Spenser 6 years ago from Austin, TX

      Anouser, I agree that following the employment laws in your country is really important - but it's not just the laws, but also the customs of the area you live, that you need to be familiar with if you want a great nanny. For example, in the U.S. minimum wage is currently $7.25 an hour, but many nannies make more than that and wouldn't respond to an employment ad that was only offering $7.25 an hour - it's important that parents know that going in if they want to be able to have their pick of nannies.

    • profile image

      Anouser 6 years ago

      Just follow the employment laws in the country you live.

    • Kate Spenser profile image
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      Kate Spenser 6 years ago from Austin, TX

      tchenruiz, I don't know how often it is updated. I've tested it out in locations I am familiar with, and the rates it's giving me seem pretty much in line with what I have gotten/what I've seen offered for babysitting, give or take a little bit. Keep in mind that these rates are just for babysitting, so depending on the local nannying culture you may offer a bit more for a full-time nanny, especially one with a lot of experience... hope that helps?

    • tchenruiz profile image

      tchenruiz 6 years ago from San Francisco Bay Area

      Kate, thank you for the article. Do you know how often Care.com updates the database? The rate seems a little low for my area.

    • Kate Spenser profile image
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      Kate Spenser 6 years ago from Austin, TX

      Oy, thanks for letting me know, cardelean! That's really annoying. :(

    • cardelean profile image

      cardelean 6 years ago from Michigan

      FYI, your hub content was stolen and put on this Flixya blog. Go to this link to see and then contact them to have it removed.

      http://www.flixya.com/blog/3129909/What-Should-I-P...

    • Kate Spenser profile image
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      Kate Spenser 6 years ago from Austin, TX

      Thanks, Will! I agree that a great nanny can make all the difference for working parents. Thanks for the feedback!

    • WillSteinmetz profile image

      WillSteinmetz 6 years ago

      Informative hub. Nannies are such a help for working moms.

    • carolp profile image

      Carolina 6 years ago from Switzerland

      Very helpful informations. Thanks for sharing. To have a Nanny is very helpful for Mothers who do part time jobs or staying at home Moms. A few hours having time for oneself alone or able to be with friends for a few hours, or going to work a few hours would be a good diversion of getting away from the hectic of taking care of the children and doing housework.

    • Kate Spenser profile image
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      Kate Spenser 6 years ago from Austin, TX

      @AspiringNewMoms, I agree that having another person involved in the child's life can be very beneficial - even if it's just a few hours a week, having someone who is fully devoting their time and attention to the child can be excellent for the child's development and emotional stability!

      @PiaC thanks for the feedback!

      @Philpott Online, glad I could help - if you have any other questions I can help with about the process let me know!

    • Philpott Online profile image

      Philpott Online 6 years ago

      Wow! There is more to think about then I realized. Thanks for the info.

    • PiaC profile image

      PiaC 6 years ago from Oakland, CA

      I know lot of parents struggle with this decision. It's a valuable and informative hub. Your advice regarding how much to pay a live in nanny is especially helpful!

    • AspiringNewMoms profile image

      AspiringNewMoms 6 years ago

      Very helpful advice! I know many parents that talk about needing to hire someone for childcare. Even if a parent works at home they benefit from having childcare to improve productivity. I also think the child benefits as well. They can receive more constructive attention during the day.

    • profile image

      ashaw0417 6 years ago

      This was interesting to read because I am a full time nanny and I know that I am not necessarily getting everything I should. Thanks!

    • freecampingaussie profile image

      freecampingaussie 6 years ago from Southern Spain

      Loads in the Uk use Nannies especialy in London . I was a nanny in Chepstow, London, Below London and in France . There are always people looking for Aussie Nannies over there !

      It is an interesting job as they are still into classes as in you are 2nd class etc. The more money they have the worse they are at paying you like people who are Lords !I have a hub on Life as a Nanny !

    • Kate Spenser profile image
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      Kate Spenser 6 years ago from Austin, TX

      @ameliejan, what do most people in the UK use for childcare? Is there government subsidized childcare like they have in Scandinavian countries?

    • ameliejan profile image

      ameliejan 6 years ago from Alicante, Spain

      This was really helpful and interesting to read. We don't really have nannies so much in the UK but in the future, I can see them becoming more popular.

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      rhs8929 6 years ago

      very interesting and very helpful!

    • Kate Spenser profile image
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      Kate Spenser 6 years ago from Austin, TX

      thanks, aallard! Hope it was helpful :)

    • aallard23 profile image

      aallard23 6 years ago from USA

      Nice! Thanks for the advice.