[Parentsgroup-list] nanny rates?

Ian Stokes-Rees ijstokes at alumni.uwaterloo.ca
Wed Sep 15 20:56:21 EDT 2010

> I know this has been asked before but I can't find the email....I'm
> looking to hire a nanny for my daughter when I go back to work in
> January. She will be 9 months old. I'm hoping to hire someone who will
> take care of her from 8am-3pm and then pick my son (4 year old) up
> from school at 3pm and be with both kids till about 5pm. Since this is
> the first time I'm doing this, I was wondering what I should
> reasonably expect to pay per hour for one-two kids. Any estimates you
> can share would be appreciated. 

I would expect to pay $12 to $15 per hour, although you may need to go
as high as $17, depending on where you live, and what kind of experience
(if any) you expect.  This will be the nanny's "take home" rate (net
income), which seems to be the way nanny's think about their pay.  You
then need to cover tax withholding, employment insurance, social
security, and medic-aid (part from your pocket, part from your nanny's
pay check).  Look at 4nannytaxes.com (or something like that) for a
nanny tax calculator.  For us, this translates to paying $22 an hour for
the nanny to have a take home pay of $16.70.  It is steep, but not
paying it is illegal and tax evasion.

If you do go "under the table", and you want to be able to sleep soundly
at night, at least you can feel comforted by the fact that the IRS
estimates 60-80% of families with nannies are committing white collar
crime by knowingly evading taxing this way, and you can join that
majority.  Besides the small risk that you will be audited (the risk
seems to be very small), the other down side is that you can't claim the
$5000 tax relief the gov't provides for child care, unless you have
other "declared" childcare expenses.

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