"Excellence is not a skill, it is an attitude." ~ Ralph Marston
There is a long tradition of expressing appreciation to service workers through holiday or year end tipping and gift giving. Nannies, babysitters and other caregivers provide invaluable service to the families that employ them, and a holiday or year end bonus is very common.
Families often struggle with how much to budget for end of year expressions of appreciation, and how to express their gratitude.
Families should consider their own means and budget, as well as the relationship and quality of care when determining how much to give. The general rule is one week's pay - however HWS processes year end bonus payments that range from several hundred dollars to several thousands. There are many variables.
Do you give cash, a gift or something else?
Cash is King! Your nanny or senior caregiver has added expenses in their household related to the holidays, and a bit of extra cash is always appreciated. This is the preferred holiday year end bonus.
Many families prefer to express their appreciation in a more personalized way. A gift can be appropriate, however great care should be taken to select a gift that is aligned with the nanny's lifestyle, values and interests. A carefully selected gift should speak to the recipient.
Some families will choose to make a contribution to the caregiver's retirement account. An employer contribution to an employee's retirement savings is common in the workplace, and a generous contribution to the nanny's IRA demonstrates your care for the employee's long term financial stability.
A gift that benefits both the employer and the nanny is a financial commitment of paid professional development days and reimbursement for continuing education. There are educational conferences hosted by the International Nanny Association, Nannypalooza and NAYEC that will improve the nanny's skills. This can be a Win:Win for the family and the nanny.
Don't forget the words!
A written expression of appreciation, including specific ways the caregiver does a great job and improves your life should always be included with a year end bonus. If you don't want to write it down, stop a moment and verbally deliver the message. Some caregivers make themselves available for overtime on short notice, are willing to work additional hours when your life is demanding, or thoughtfully engage your child or aging family member in activities that directly benefit the care recipient. Catch the caregiver 'being great' and acknowledge it.
Did you know that a recent human resources survey concluded that "more than half (53 percent) of employees admit they’d stay longer at their jobs if their bosses showed more appreciation."
Don't forget about the taxes...
All bonuses, whether cash or a gift, are taxable income to the employee. They must be reported as such on all employment tax documents, including Form W-2 at year end. In the eyes of the IRS, there is no such thing as a GIFT between an employer and an employee. Anything of monetary value given by an employer to an employee is considered compensation, subject to wage reporting and employment and income taxes.