It’s a business relationship
The family/nanny relationship, of course, is going to be a business relationship, too. You’re going to work for a household. They are your employer. Here is what you can expect from your family/employer:
- Fair Compensation; below are average guidelines for compensation based upon the current market climate. It is important to note that compensation may vary, even outside of this range, based upon the Nanny’s individual qualifications and on the requirements of the job.
- Average gross weekly salary for a full-time child care provider is $600 – $750.
- Average gross hourly wage range for a part-time child care provider is $14 – $20 per hour.
- Adherence to IRS regulations as pertains to Household Employee Tax.
- Paid time off, which may include paid vacation, paid sick days, and paid holidays.
- Reimbursement for mileage when transporting children or running errands on behalf of the family.
- Annual review of performance and expectations, with opportunities for wage increase and/or additional benefits. In some instances, health insurance, or a contribution towards your health insurance.
Household employee tax and insurance information
A Household Employer is defined as anyone who pays an individual to perform duties in or around their home. This includes both nannies and home managers. If you are paid as a household employee over the IRS threshold for a calendar year, ($2,000 as updated for 2016) your employer (the family) is required to fulfill state and federal tax obligations.
Your Household Employer will pay payroll taxes of 9-11% of your gross wages including:
- The employer’s half of Social Security & Medicare
- State unemployment insurance
- Federal unemployment insurance
- Other state taxes
Your Household Employer is required to withhold taxes from your paycheck. These include:
- Employee’s Half of Social Security & Medicare
- Federal Income Tax
- State Income Tax
- Other State Taxes (some states levy additional taxes to pay for things like Disability Insurance)
- Applicable city tax
Health insurance information
Depending on your personal situation, you may or may not require health insurance from your employer. Nannies who require full health insurance may request health insurance from their employer, or may request a contribution toward their health insurance premium.
For additional information, you may refer to resources from GTM Payroll Services– Health Insurance for Nannies or Affordable Care Act information at www.healthcare.gov.