Nanny cost: Expensive or Investment?

Do you need a nanny to take care of your child/children while you are at work? Many parents with experience in finding a nanny with the right qualifications would tell you that it's never like choosing an ice cream flavor. However, if you've found the right person to fill your space, at least, in providing childcare, the next issue would be nanny cost.

How much should you pay a nanny and what is the cost associated with having a nanny at home. First, you need to know that there are two kinds of nannies today – live-in and live out nannies. Live-in nannies are those who stay with you at home, so you need to provide her with a private sleeping quarter and meals. The live out nanny comes over to your house at a time you both agreed on, and is entitled to meals as long as she is with your child at home.

In the United States, nannies are covered under a special regulation that entitles them to a compensation and benefits package required by law. When you hire a nanny, you become the employer and the nanny, the employee. Similar to other jobs, the background and experience of nannies will determine their compensation level. If your nanny barely has childcare experience, she is likely to be at the lowest end of the compensation range. The higher the candidate's childcare experience coupled with related training and education, the higher nanny cost will be.

Most often than not, live-in nanny cost (salary) can range between $525-650 weekly while live-out nanny cost is between $525-750 per week. As the employer, you are responsible for your nanny's taxes unlike when you bring your child to a daycare center, where compensation and benefits, as well as taxes are shouldered by the owner of the place.

Tax Exceptions

There are exceptions to nanny tax policies. If the nanny works for you for 29 hours/week or less, then she is responsible for paying her taxes which she can file via IR56. You can save on nanny cost if the nanny is hired only temporarily or as a babysitter. This is possible if your work allows you spend more time with your child.

You may also wish to bring your nanny along on a vacation, if it's absolutely necessary. This will not only increase nanny cost but your vacation expenses as well. Remember, the nanny's transportation costs will be billed against you, and so will her other needs while taking care of your child during the vacation. You can continue paying her the daily salary just like at home.

Nanny cost may be a small investment if you are assured that your child/children are in safe hands when you are away.

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