Creating an attractive salary package can be beneficial to both the employer and the nanny. For the employer, a salary package could save money and reduce the taxable compensation of their employee enough to make a nanny candidate that was out of their hiring budget in it. For the nanny, additional benefits, like contributions towards health insurance, are almost always appealing and can reduce a nanny’s taxable income as well, allowing her to her to save money.
As you prepare to offer your idea nanny a position within your household, consider offering a salary package that includes:
- A fair hourly rate. Do your research into the market value of nannies in your area. Where you live, as well as a nanny’s experience, education, hours, duties, and responsibilities will factor into an hourly rate. The International Nanny Association publishes an annual salary and benefits survey that can be found at www.nanny.org.
- Legal overtime. Live-out nannies, as well as live-in nannies in some states, are entitled to overtime pay at the rate of 1.5 times their hourly base rate. For live-out nannies, overtime kicks in after a nanny works more than 40 hours within a 7-day period. The threshold for live-in nannies can be 40, 44, or more hours, depending on the laws of the state where you live.
- Good benefits. Typical nanny benefits include paid vacation, full or partial contribution towards a health insurance premium, 8-10 paid holidays off per year, sick time and personal days. Nanny employers have also been known to contribute to retirement funds and provide paid time off for professional development to secure their ideal candidate.
- Flex Days. Instead of breaking paid time off down into vacation time, sick time, and personal time, flex time gives the nanny a set number of days per year to use at her discretion. With flex days, vacation days are typically still required to be scheduled and approved in advance.
- Non-taxable forms of compensation. The Internal Revenue Services views health insurance premiums paid to a state-licensed insurance provider, tuition at an accredited college or university, and parking or public transportation fees as non-taxable forms of compensation. While there are caps on the amounts, the savings from utilizing non-taxable compensation adds up.
- Job perks. Adding a nanny onto your family’s health club membership, allowing her to use your vacation home, giving a bottomless Starbucks card, providing her with access to your family’s gym, and allowing her to share meals and snacks with your children are some of the perks that may offset a lower salary and attract the candidate you desire.
- Mileage reimbursement. If a nanny will be using her personal vehicle for transporting the children or performing work related errands, be sure to reimburse her for it. Each year the International Revenue Services publishes the standard mileage reimbursement rate that employers can use to determine how much to reimburse their nanny.
- Year-end Bonuses. Year-end bonuses or performance based bonuses can prove very attractive to nanny candidates. Depending on how much you are comfortable giving, some nanny employers have been known to dole out 1 to 4 weeks pay as a year-end bonus. The longer a nanny has been employed by the family, the larger the bonus she may receive.
- A business credit card with a budget. Many nannies spend their own money to purchase crafts, supplies, and other items for the children in their care. Providing your nanny with her own credit card and a monthly spending budget can prevent her from dipping into her own pocket to purchase items for on the job. Having a budget to take the children out to lunch or to activities, and a credit card to do those things with, can be an attractive part of a salary package.
- Direct deposit from a payroll company. Using the services of a household payroll company that will pay your nanny in a timely fashion and ensure that the proper taxes are withheld can be very appealing to nanny who wants things done right. No one wants to ask for their paycheck each week, so knowing that it will be deposited automatically will appeal to many nanny candidates.
Once you present your nanny candidate with a job offer, she’s likely to want to take some time to review it before accepting it, declining it, or proposing changes to it. Once you’ve solidified the offer, be sure to execute a mutually agreed upon work agreement that outlines the salary package, in addition to the nanny’s schedule, duties, and responsibilities.
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