A lot goes into figuring out the right hourly rate to offer your new nanny. First, you have to consider your personal situation:
Do you live in a large city where hourly rates are higher or does your rural or suburban location bring the average wage down?
What is the minimum wage in your city and state (most nannies charge much more than the minimum wage, in my experience)
How experienced is your nanny?
How many children do you have?
Which additional duties do you expect your nanny to perform? ie. cooking, light cleaning, caring for pets, etc.
Here is a great resource for understanding what average nanny hourly rates might look like near you.
Once you arrive at an acceptable market rate, you have to consider additional costs that get tacked onto the base wage. These look something like:
Nanny taxes (see our detailed guide on what nanny taxes are and if you have to pay them)
Nanny tax & payroll service for calculating taxes and providing documentation like paystubs and W-2s. Nanny payroll help can vary from low-cost or free DIY resources to full service companies that cost $500-$1,200/year
Paid time off - you'll need to decide if you need to hire backup childcare when your nanny takes vacation or is sick and whether or not you'll pay your nanny for these missed days
Other benefits like free snacks or meals, subsidized health insurance, bus or parking passes (see our list of ideas for tax-free nanny benefits)
Now that you have an hourly rate in mind and an idea of extra benefits that sound interesting, you need a way to calculate nanny taxes and see how the full package fits into your family's budget. We created a customizable budget template that will calculate your nanny's true cost.
Since we're big fans of budgets around here, we went a bit further and made this template into something you can use to forecast every bit of income and expense your family might see in a year - feel free to be as detailed as you want. Just need to calculate nanny costs? No problem.
Get your free, editable nanny wage calculator and family budget template here.