[Editor's Note: The following post was submitted by regular reader and occasional contributor, Dr. Matthew Pirotte, MD, FACEP, an Assistant Residency Director for the Northwestern Memorial Hospital Emergency Medicine Residency Program. You can follow him on Twitter @ MJP_MD. We have no financial relationship.]
Many couples will end up paying for childcare in one form or another. This is especially true for households where both spouses are working and almost certainly true for dual physician households. You love your little bundle of joy — but you gotta go to work. At physician levels of income, most people avoid the second income trap and especially in two physician homes it usually makes financial sense for both parents to work. If you’re lucky enough to have a great parent-in-law who wants to come over and take care of things then stop reading now and go study how you set your portfolio. Daycare is an option, but many daycare centers are not open at 5 am when an emergency doc is headed in for her 6 am shift. Many busy docs will find themselves hiring a nanny to care for their kids. Here are some tips and tricks my anesthesiologist wife and I learned on our own journey.
8 Tips for Hiring a Nanny
1) Follow IRS rules and make the nanny an employee
Many docs pay their nanny in cash. This is a bad idea and clearly not consistent with IRS rules. If you pay a domestic employee more than $2100 a year the IRS says you need to treat them like an employee, not a contractor. As strange as it sounds if you have a cleaning lady for $100 twice a month the IRS says very clearly that you should not just be using Venmo. Certainly, for a nanny making what you hope is a living wage you’re going to need to do this “over the table.” You will need an Employer Identification Number (easy to get from the IRS) and a way to calculate payroll. You’ll need to produce an I9 form proving that the nanny is eligible to work in the United States. You will be responsible for employer taxes and unemployment insurance. You will need to file a Schedule H with the IRS. None of this is particularly complicated but it all needs to be done and there can be consequences for those who ignore these rules. We use a company that just deducts from our checking, figures it all out, cuts our nanny a paycheck with a paystub and retains all of the tax information (I have no financial relationship with this company other than being a client).
2) Insist on a nanny who will also follow the tax rules
While a wad of cash every 2 weeks is a good idea for domestic employees looking to maximize their take-home pay, it is not legal. These cash arrangements are bad for the nanny if they are trying to build employment history, get injured on the job, file for unemployment assistance, or want to collect a nice Social Security check in retirement. We met one great candidate who was looking for a cash job because she did not have a work visa. As two people with professional licenses, we did not want to get involved in a situation like that and passed on this otherwise lovely person.
3) Use a reputable source to find nannies online
Some of us will be lucky enough to get a great person through word of mouth at your hospital, office, church, or the like. Others will have to rely on the internet for help. Many sites like Care.com and SitterCity can perform background checks on the nannies they list. These seem to me to be the industry leaders. Both are good services and inexpensive to use. In some cities, there are nanny placement services although these can be fairly expensive. There also exist some higher-end websites and placement agencies. My personal experience with these is limited but I have friends who have used the services. The nannies coming through these services are the type who are going to perform full-service house management and have a gourmet dinner on the table when you get home in addition to having Junior in a clean romper. Expect to pay a significant premium if you enter these waters but for some very high-income doctors, this may be money well spent.
4) Be very clear about your needs in your online post
We have hired two nannies. For the first I wrote a fairly generic job post, 1 baby, looking for full-time work, etc. I was overwhelmed with responses and had to spend quite a bit of time sorting through and communicating with many applicants. When our first nanny moved away and we went back on the hunt I was much more explicit: we needed someone with full-time availability who had no side gigs interfering with the main job. We needed a dog-lover who was willing to do sick care, be paid through payroll, and to work shifting and somewhat crazy hours. I even posted a sample schedule as a “worst week scenario.” We got many fewer responses and most were more considered than before. This was a very large time saver for us.
5) Establish clear expectations and have a contract
Dr. Matthew Pirotte
Want your nanny to do dishes and household laundry? What about dog walking and grocery shopping? Will he or she be willing to work when your toddler is puking her brains out? These are all things to decide before the first day on the job. Simple nanny contracts are available online and you can edit these to suit your needs. Review by an attorney doesn’t seem to be necessary but would likely be relatively inexpensive. Be clear and straightforward, be as specific as possible. “Nanny will perform 3-5 household errands a week as requested” is far better than “Nanny to help as needed.” “Dishes done and countertops clean each day” is superior to “Light housekeeping expected.” Expect some negotiation especially if you are hiring an experienced nanny. It is better to that before work starts than to try to change gears in the middle of the race.
6) Think about a “salaried” position
Technically any domestic employee must be paid by the hour. With my shifting ED schedule and my wife’s long days in the OR, we needed someone full time and placed a high value on their not constantly trying to do side gigs. For this reason, we worked out an arrangement where our nanny would be guaranteed 40 hours pay a week regardless of hours worked. We agreed on a yearly salary and so while technically she is paid by the hour it is a simple math equation to arrive at her biweekly paycheck. If we have a light week and she works 25 hours she gets paid her full time “salary.” When we take a long trip she is still getting paid. On the flip side, we have asked that our nanny not expect overtime for a single 50-hour week scattered here and there if most of her weeks are at or under 40 hours.
[Update by author after publication: Some commenters have very correctly pointed out that employers cannot negotiate away overtime from nannies. In composing this piece I just should have left this sentence out because it is not reflective of what we are doing and those commenters are correct that it would be illegal if it were. You cannot “bank” hours to use them later and work hours for hourly workers cannot be averaged over several weeks to avoid paying overtime. I was trying to make a point about guaranteed hours and it did not come off well. What we actually do is guarantee hours for our nanny partly because we want to make sure we have her when we need her and party because see #8 below.]
We also made it clear up front that for a generous salary we expected to have first dibs on her time during the week. This has encouraged professionalism and buy-in on our nanny’s part; she is motivated to hold a job where she will get a steady paycheck even while we are overseas.
7) Consider a tech-savvy hire for ease and convenience
We do all of our scheduling through a shared google calendar with hours sketched out well in advance. This allows us to track hours and our nanny to plan her life. We also have a text message chain with our nanny that is a deluge of photos of our daughter and dog romping around various parks and playgrounds. Our nanny carries a credit card for household purchases rather than petty cash and we immediately reimburse her electronically for any expenses. All of the financials are online as well; our nanny experience is paperless and seamless. While there are surely many lovely people out there who do great child-care and are still using flip phones and pocket calendars, we enjoy the added convenience of our smartphone system.
8) Be a great boss
Life is hard for people who are trying to support themselves and their families on relatively low-wage jobs. While nannies are critical to many households, the average salary for a full-time nanny is below the national average. We wanted our nanny to feel that they had a fair compensation structure and great bosses and were willing to pay more than the absolute minimum rate out there. One question I asked nannies as I was interviewing was “what makes a great boss for you?” and “what makes a bad boss?” The most common thing I heard in the bad boss column was disrespect for the nanny as a person and an employee, one nanny I interviewed said she quit a job where she loved the kids because the dad “made it clear to me that he thought being a nanny was a joke.” Don’t be that guy. Be fair and communicative, provide schedules in advance, and consider being generous with tips and bonuses when someone does great work.
Final thoughts
The right nanny makes your life work. There is nothing quite like getting home from a tough shift and seeing your baby giggling with delight as a caring, professional nanny sings and plays with her. If you put in the time to find the right person and arrive a fair employment agreement those salary checks you pay out will seem like some of the best money in your budget.
What has been your experience with hiring a nanny for your children? Do you have other tips to share with readers looking to hire a nanny? Comment below!
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My wife and I both work, but we opted to go with the more traditional day-care route given my wife’s normal hours of operation. Childcare is crazy expensive (ours at the hospital costs us about $1,800 month) and as you alluded to doesn’t always make sense when a second job doesn’t earn a lot of money.
Based on the information you gave for their pay, it seems that we are paying roughly what the low end of the nanny spectrum would cost in yearly childcare costs.
I’d be curious to know what other physician’s who do this are paying their nanny each month for two kids.
TPP
yeah that sounds low (see below for more details).
lucky you!
I’ll add a poll people can answer anonymously.
Thanks for doing that! Interesting results.
TPP
Thanks for the great post. My wife and I are both physicians with one kiddo and for now our schedule seems to work out okay with daycare, but once we have a second kid we may decide to get a nanny. One small bit of critique – why is this article so coy about money? This post was uncharacterically vague about financial details. I’d love to know more about what you pay your nanny, what the taxes are, how much you need to pay the management company, what the websites charge, etc. This is WCI so theoretically we aren’t shy about money right?
Thank your for the feedback I realize you are probably correct about this.
I wasn’t trying to be coy but rather wanted to follow Jim’s guidelines about “evergreen” content.
Our base salary for our Nanny is $44k/year. I know that sounds crazy but it’s about the market rate in Chicago. The challenge is that when a nanny says they want to make $18/hr they are almost always saying the want to TAKE HOME that amount of money.
The payroll company charges around $180/quarter.
Happy to answer any other questions especially over on the Forum. If you PM me I am happy to send you all of my statements, contract, etc.
Kids are expensive!
Thanks for the response! I guess $44k/year isn’t too bad, considering how much easier a nanny can make your life. I don’t mean to harass you about your finances, this is just a topic that I’m starting to think about, so I was very curious about the specifics of nanny costs. We appreciate you sharing your thoughts!
i’m usually happy to talk specifics, glad you enjoyed the post!
Most people have limited comfort putting their details out there for tens of thousands to read, even anonymously. It’s really the same reason you’re not signing your real name on your comment. Most of the time people will reveal right up to their comfort line. Sometimes they didn’t realize people want as much detail as they do. And sometimes people want detail they don’t need and they’re just playing financial voyeur or have ulterior motives. For instance, you wouldn’t believe how much I’m asked to reveal about my business by direct competitors, information that has no other use other than to help their business/hurt my business in the marketplace. At a certain point, you’ve just got to say “No, that’s not what I’m trying to do here.”
Thanks for the great post! I/we went the way you originally alluded to (having a mother/in law take care of the kids), definitely has its benefits. That said, every silver lining has its cloud, some of which I think could be shared across other in-home child care methods:
-As the shift worker of the couple, I’m sometimes dragging home at/after 0200-0300 while the rest of the house is up at 0500-0600. Back when the kids went to a daycare, I would routinely be able to sleep through, or be up enough to say goodbye and then get back to sleep after they left. Now that they’re in home all day…they do their best, but there’s no going back to sleep so I get to enjoy a 2-3 hour sleep day.
-If you have a single person responsible for child care rather than a company, and that person is sick, you’re SOL. Onesy-twosy occurrences is just life (how many daycares have been rocked by norovirus and had to shut down for a few days). Something big involving surgery, prolonged recovery, and/or daily/weekly treatments though and suddenly you’re scrambling for another solution vs taking large time off.
you are correct about that my friend.
on a day to day basis i think my wife could use our own sick call, my group especially is awesome about covering each other for stuff like his.
longer term we would probably have to lean on grandparents, fortunately they are awesome as well.
Excellent points. One reason I wanted out of nights so much was it was simply inconvenient for family to work their schedule around my need to sleep during the day several times a month. In some homes, you can get a “cave” that protects you from sound in the rest of the house, but it’s tough.
we converted my office downstairs into a sleeping cave. one of the best decisions we’ve made in awhile
A “call room” has been on my wish list for a house for years…if I keep moving every 3 yrs for the army, I’ll probably get one about the time I’m ready to drop night shifts anyway!
We have a nanny now for 3 kids with our toddler in day care but used just daycare for >5 years. If our nanny is sick we are SOL. However, day care (and school) do no accept sick kids and with 3 kids the odds of one of them being too sick for school/day care approaches 1 during much of the winter as their threshold for “sick” is low. Our nanny has taken 1 sick day in almost one year. Meanwhile my 2nd grader got sent home with a “fever” of 99 and a sore throat recently and he or his sister were home sick >2 days/week the past 2 Januaries and Februaries. Schools here are also closed for teacher development, election days, and a bunch of holidays that normal adults are expected to work in addition to 1-2 half days/month.
They only reason we were able to do just day care as long as we did is bc my husband had an extremely flexible schedule and we had family help.
Great topic with lots of useful information.
I do have one concern. You wrote, “As strange as it sounds if you have a cleaning lady for $100 twice a month the IRS says very clearly that you should not just be using Venmo.”, which is misleading. This would be true if your cleaning lady worked exclusively for you, you dictated her hours, what she did during the time at your home, set her hourly rate, etc. It would not be true if she owns a cleaning business, or is employed by a cleaning business, sets her rates, has control of her schedule, determines what services she supplies for her rate, etc. In the latter case, she is a contractor, like a plumber or an electrician. Certainly, a full-time nanny, that only works for you, is an employee; however, there are circumstances( a couple of days a week or a mix of days and hours) where a nanny may run a business, or be contracted out by a business, for multiple clients, that is akin to the cleaning lady example. This in no way invalidates the point that everyone should follow the IRS regulations on domestic employees, it just means there are legitimate cases where a person cleaning your house, watching your kids or cutting your grass is not a domestic employee.
that is a very fair point and i appreciate the comments.
the much larger problem for docs is the problem of acting like the IRS isn’t crystal clear on how you should treat your nanny for tax purposes in the vast majority of cases. we all know people who do handfuls of cash. i’m definitely not passing judgement moral or otherwise but like i said the rules are clear.
Via email:
HI — wanted to let you know that from what I understand, the advice in #6 is illegal:
https://www.care.com/c/stories/1610/banking-hours-why-it-does-not-pay-off/
https://www.nannycounsel.com/blog/nanny-pay-guaranteed-hours-vs-salary
Just wanted to help, love the site.
Thank you for these thoughts. I do not think it is illegal and spent a great deal of time thinking/worrying about this.
#1: our nanny works <40 hours/week the VAST majority of the time, as a matter of fact i would say she has only gone over maybe once. if she felt strongly about overtime for those hours we would happily pay them. the spirit of our arrangement is that we want to purchase her availability as a full time person, not that we are trying to play three card Monty with hours.
#2: we are not "banking" hours and asking her to use them instead of overtime (that would be illegal).
#3: the guaranteed 40 hour arrangement is very much in our nanny's favor as she is making money when we are out of town and she rarely even hits 40 hours
#4: we are not asking her to do non-nanny stuff when we are out of town as part of her typical work.
#5: I very specifically put "salary" in quotation marks. Our nanny is an hourly employee who is guaranteed 40 hrs/week. It's fairly simple for her and us to project that out to a "salary."
I am not trying to be flippant about employment law especially in critical areas such as childcare -- I know lots of childcare professionals have been screwed by employers. I guess my overall thought on this is that with the widespread use of envelopes full of cash to pay nannies who don't even have a contract I would happily defend an occasional 42 hour week. Does that make sense?
I see what you are saying but if your nanny reported you on a week she worked > 40 hours she would prevail and you would owe her the money, regardless of whether you or she feel that she is being taken advantage generally.
The way around it is to adjust the hourly rate to make the numbers work. If your nanny’s agreed upon salary is 50k you can can adjust the hourly rate + overtime rate to equal 50k using algebra. If you are in EM or another specialty with a lot of call/nights, you can predict with decent accuracy what your overtime needs are for the year and adjust the hourly rate accordingly. This formula leads to some variability in weekly rate related to overtime though nanny always gets paid at minimum the regular 40h/week rate so there are not wild fluctuations and they can budget reasonably.
Example: We pay for 50 hours/week regardless of hours worked (40h regular and 10 h overtime rate). Everything else is at the overtime rate. Her hourly rate is on the low side but the salary at the end of the year is basically what we agreed on–a little higher bc we rounded up. I am not a lawyer but my husband is and he says this is legal.
probably legal.
@Darley
that is certainly true, however we do document hours and she does not work over 40 hours the VAST majority of weeks.
in this paragraph i am speaking more of a hypothetical nanny not our current absolutely wonderful person: if she wanted to be paid overtime we would certainly accommodate that.
for this to be a problem she would have to report us which i think is unlikely (see #8)
@Sophia
that is interesting but it seems like just a more complex version of what i am already doing
illegal. it doesn’t matter if she wants or does not want to be paid overtime. part of the purpose of overtime laws is to protect people that are not in a powerful negotiation position.
Practically it’s the same at the end of the year.
Technically, while you’re within the spirit of the law what you’re doing may not be totally legal. Whether it’s worth the hassle of changing your system to be 100% legal is up to you
Dude, not paying your nanny overtime is illegal in all 50 states. It doesn’t matter if she is “ok” with it or that she works less than 40 hours some weeks (while being compensated for 40), or that your employment practices are better than handing her cash envelopes. You say you follow the rules in Tip #2 because you have professional licenses so why not follow the overtime laws also? We also pay our nanny a guaranteed number of hours (47), but if she works 50 hours, she is paid overtime for those.
Tip #6 should be deleted from this article immediately so that other folks do not follow this illegal practice.
i don’t know how much more clear i can be about this, my nanny basically does not work overtime.
i am not trying to avoid paying her overtime. i am not advocating a strategy to avoid paying her overtime when she works it. to date i don’t think she has ever worked more than 40 hours in a week.
i see what you are saying and i could have worded that more carefully. i think people are getting the impression that i am not giving my nanny a chance to appeal overtime hours when in reality what i’m doing is paying her for lots of time when she doesn’t actually work. with all appropriate deference to employment law and without advocating breaking it i think if you could see our actual arrangement you would understand why it works. if anyone is getting the short end of this deal it is me, but see #8.
I am sorry but what you are describing is not legal. The issue of guaranteed hours and paying overtime can not be conflated. The FLSA is clear on this. We also pay guaranteed hours. In our market, no halfway decent nanny wouldn’t demand them. So that is what we offer to attract and keep a quality nanny. HOWEVER, that doesn’t mean we have some exemption from labor laws. Nannys are always hourly and every week they work more than 40 hours, regardless of what happens any other week, you owe them time and a half for every hour over 40.
It sounds like you meant to say IS illegal (judging by the rest of your post).
I don’t know how much clearer your illegal practice could get:
“On the flip side, we have asked that our nanny not expect overtime for a single 50-hour week scattered here and there if most of her weeks are at or under 40 hours.”
When your nanny works 50 hours a week, you do not pay her overtime hours, as required by law.
You justify your practice by saying that your nanny gets the better end of the deal, which may be true, but it is nonetheless illegal.
see below please.
We have had a nanny for going on six years now. I would like to get opinions on whether not Worker’s Compensation insurance is common. We have a policy in case our nanny is injured on the job. It is expensive at around $900 per year but gives some peace of mind that we have some protection in case there is a fall or injury on the job.
I am not a physician but a retired CPA.
You are liable for the worker’s compensation costs of an employee whether you carry insurance for it or not. And that can be very costly in falls, back injuries and the like.
Personally, I think that I would hire the nanny through an employment agency where they will take care of all of the tax, worker’s compensation, and other legal requirements that you don’t really want to work through.
One other note. You DO need to pay overtime in accordance with the laws of the state you are domiciled in. There is no way to “negotiate” out of it. If you terminate the nanny, she can come back for overtime post employment and it will be the employer’s requirement to prove that you did not work her overtime. The states are pretty unforgiving on this.
thanks for the reply
just to be clear: my arrangement is not to try to avoid paying overtime it is to guarantee availability. we really don’t need more than 40 hours a week we actually usually struggle to get to 40 simply b/c we generally have plenty of time where one or both of us just wants to hang with the kiddo.
my arrangement is almost all benefiting the nanny!
Thanks to all who have commented so far. I think #6 is reading more like I’m advocating ignoring critically important overtime laws and less like the point I’m trying to make which could have been far better summarized as “consider guaranteeing hours if that will help make this work for you.” I’ve reached out to WCI about editing this and will try to do so. While I’m enjoying the discussion I’m going to hold off on further comment on topic #6 until I have a chance to edit it, if WCI prefers that I leave as is then please just refer to my prior comments above — I’m not advocating not paying overtime and I’m neither trying to avoid paying it nor actually avoiding paying it.
We are a dual physician household and employ a full-time nanny and use a payroll service. I have to agree with comments above based on my research on overtime pay and information from our payroll service. We also “salary” our nanny at 40 hours/week and when she only works 30 hours or we are on vacation, she gets a sweet deal. Everything I know or have heard is that if she works over 40 hours in one week, you are required to pay overtime. Doesn’t matter if she only worked 20 hours the week before. I strongly encourage you to look into this again so you do not end up with any issues! It’s not a big financial burden and just puts a little extra money in your nanny’s pocket.
For perspective we are a dual physician income (wife part time) and pay $19/hr 40hours a week 52 weeks per year guaranteed. We live in TN. Pay FICA, SUTA, FUTA. She’s off when we are out of town. Give a cash bonus at Christmas time.
You get what you pay for. Have paid less before and got burned. Get a good one. Pay well. Never do laundry again. Don’t stress when your kid is sick. Go to work. Take care of patients. Enjoy.
that is basically exactly our set up.
i agree with you that you get what you pay for!
Is there a way to use pre-tax childcare savings towards a nanny’s hourly pay?
i have a dependent care saving account that i max out ($5k).
my understanding is that you can pretty much just tap it out at the end of the year and submit receipts for nanny pay up to 5k. i think the IRS is pretty clear on that.
May I ask what company you use for the dependent care FSA? Can you set one up as an individual? Or does it need to be provided by an employer?
Thanks!
i have no idea if it has to be through employer
my uni uses payfelx
We have employed 3 nannies and now have 3 kids and I would say I totally agree with all of the above. All of our nannys have left due to life circumstances and not any trouble we’ve had and our experience has been overwhelmingly positive. Central is we recognize how important a job they have and constantly appreciating them and checking in, valueing their opinion on how the kids are doing, etc. Our current nanny has been with us for over two years, found her on care.com, and has been awesome and gone through several raises.
I would also agree that you should use the DSA if you are going through the IRS system to save some money on taxes.
By the way, are you related to an Andrew who is in medicine?
DM me on the forum
Two physician family here.
We, like many others, after trying a number of solutions, decided to go the Au Pair route.
An au pair is kind of a cross between an exchange student and a live-in nanny. It is a federal program which is legal/legitimate/over-the-table, and highly regulated. Au pairs (who by definition are visitors from another country, on a J-1 visa) are recruited through a number of agencies in the US which compete for business, but all have to play by the same rules. Fees and regulations are set by the US government.
The advantages of an au pair are:
1. Very flexible schedule – you determine when you need them to work. This is HUGE for two physician families with unpredictable schedules. By regulations, the au pair must have 1.5 days off per week, and a weekend free of childcare responsibilities per month.
2. can provide up to 45 hours per week of childcare
3. low cost (in terms of dollars)- you pay the agency about $8000 per year, and you pay the au pair a weekly stipend set by the government- currently $195.75 per week, plus you pay for them to take one college course at a local college. Note: you also provide them with room and board, plus cover any other expenses needed to do their job (including car/car insurance/gas, etc.). The au pair also gets 2 weeks of paid vacation per year.
4. If things don’t work out, the agency helps remove and replace the au pair. (These situations can become quite sticky in a hurry if things don’t work out with a live-in nanny who is not responsible to an agency.)
5. The agency provides the au pair with basic health insurance.
6. When it works well, your au pair winds up becoming like a member off your family, and may be a friend for life.
The disadvantages are:
1. You have someone living with you. By regulations, you must be able to provide the au pair her/his own private room in your home. If your plan was to have a nanny who does not live with you, this program is not for you. The au pair will necessarily be in your home/kitchen/living room as well. Some are easier to live with than others.
2. The au pair’s time expires after one year. They can extend for an additional year, but their visa lasts a maximum of 2 years, after which they must either return to their home country or obtain a different visa to stay in the US (usually very difficult.) You must then be prepared to recruit and train a new au pair every 1-2 years, assuming everything works out, and they last the whole year. You have to get good at “HR”.
3. The au pair must enroll in and take a college class. The timing may conflict with some of your work.
4. The actual cost/value of what you provide to the au pair may be significantly higher than the dollars involved- in doing this calculation, you must include the cost of rent of a similar room and food in the area where you live. This could be $3000+ per month depending on local cost of living. You should also include auto costs and insurance, if your au pair will be driving.
Thanks for post about Au Pairs. It was right on. We have used Au Pairs for the past 3 years (via EurAurPair.com). Have 4 kids ages 3 up to 9 now, my wife is Active Duty orthodontist and I am an EM doc. Life is crazy and busy. My schedule changes every week. Our Au Pair acts as before and after care for the elementary aged kids, help on nights/weekends I am working, and care for unpredictable sick days. It has worked out well. Overall, I think the value is good – after the initial cost the weekly rate is pretty low ($195.75/week) for up to 45 hours/week of care. Our current Au Pair is on her 2nd year with us and once you get them in a routine they are very helpful. There are hassles involved. These include getting them set up with driver’s license, social security card, orienting them to the area, scheduling classes, accounting for their culture (all are from other countries), language barriers, someone living in your house 24/7, having another kid to take care of and feed (Au pairs are predominantly younger women and some are just kids themselves), worrying about driving safety. Our nanny totaled our car soon after driving it on her own. Luckily no one got hurt, but cost us a chunk of change and we severely limited her driving after that. It’s been a mix of good and bad, but the longer you have them the more it pays off. So having them stay a second year if it is a good fit is a lot easier.
We are a two physician household as well.
One important point I’ve not seen anyone mention is monitoring your nanny. With so many in home cameras and security systems, this is important. We actually fired our nanny who was SO NICE when we were present but screaming at our 3 month old throughout the day when viewing the video. She was found on care.com and I called multiple references who gave excellent recommendations. My wife has heard numerous similar stories through her facebook physician mom group.
Since then, I’ve taken note that my colleagues who have “wonderful” nannies often times do not even have monitoring in their homes. We actually switched to a daycare with an “open” concept. This is very inconvenient when a kid is sick and of course decreases the amount of one on one attention your child gets but ultimately feels safer.
yikes. we didn’t do that but i can see the value in it.
i wonder if at this point there’s a bit of a Hawthorne effect and nannys expect to be monitored.
i do think an older kid will let you know to some extent. when our nanny walks in the door our baby (and dog for that matter) go absolutely bonkers.
I enjoyed this post as well as many of the comments. We have 1 nanny for 1 child; ~45k per year including everything (insurance, etc.). Do you give a cash holiday gift or bonus at the end of the year? I am curious as to how much? I have seen a range from a nice gift card (e.g. dinner for 2 at a nice restaurant) all the way up to 1-2 weeks salary.
Where we are one week’s salary is standard and 2 is not unheard of. Am considering 2 this year as she’s been with us long-term and came through for us in many ways this year.
I think the 1-2 week salary thing is pretty standard.
1 seems good for first holiday, 2 seems fair if it’s a long term person.
For those of you that give cash/bonus/gift around the holidays, do you do it through payroll or informally? For example, can I just give a cash Christmas gift to our nanny in an envelope, or write her a personal check? Or would that be considered compensation and subject to employer and employee taxation since we are her employers?
Nevermind, figured it out. Definitely looks like it’s considered taxable compensation.
We are a dual-physician home, and we are having family watch our kids while we are working. We’ll reimburse them for gas and give a little extra. I anticipate the total amount that we’ll give them this year will be around 10K. Will I need to issue them the forms listed in #1 or give a 1099? Thanks!
This sounds like a grey area. The IRS number for domestic employees is $2100/yr. If you exceed this then the answer is yes.
I am by no means an expert so would get some other opinions. Sounds different than hiring a nanny to watch your kids at your house. Especially if the family is watching your kids at their house.
I think you’re supposed to be treating them as a household employee or a day care service. That means a deduction for you and taxable income for them if reported properly.
So when tax season comes around again I would need to issue a W2 as opposed to a 1099?
Yes.
https://www.irs.gov/instructions/i1040sh