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Calculating Nanny Overtime

Posted by HomeWork Solutions on Aug 25, 2011 9:12:00 AM
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Many families have children heading back to school this month. It is not uncommon for a nanny who cares for both an elementary school child and a pre-schooler or younger to negotiate two different hourly rates - one for one child only, the other for both. The puzzle for many nanny employers is how to calculate the correct overtime rate. Legally, the "regular rate of pay," that which is used to calculate the overtime differential, must be at least the weighed average of all rates used in the work week. Here is an example:

Nanny works 8 am - 6 pm M-F
Child #1 attends grade school 8 am - 2 pm
Child #2 is in nanny's care all day - perhaps with brief morning pre-school or other social activity.

nanny overtime calculationNanny's hourly rate is $14/hr for one child, $16 for both. Her regular wage is calculated as:

6 hours/day * $14 * 5 days = $420
4 hours/day * $16 * 5 days = $320
Regular pay = $740



Calculate Overtime:
Regular pay (740) / number of hours (50) = $14.80/hour regular rate of pay
Regular rate of pay (14.80) * 50% (overtime differential) = $7.40 premium pay for overtime.
Overtime (10 hours) * $7.40 = $74.00 overtime premium

$740 regular pay + $74 overtime premium = $814 gross pay for the period.

This "regular rate of pay" can vary between weeks, changing the overtime premium. Let's explore what happens when there is a one day school holiday.

Regular wage is calculated as:

6 hours/day * $14 * 4 days = $336
(4 hours/day * $16 * 4 days) + (10 hours/day * $16 * 1 day) = $416
Regular pay = $752



Calculate Overtime:
Regular pay (752) / number of hours (50) = $15.04/hour regular rate of pay
Regular rate of pay (15.04) * 50% (overtime differential) = $7.52 premium pay for overtime.
Overtime (10 hours) * $7.52 = $75.20 overtime premium

$752 regular pay + $75.20 overtime premium = $827.20 gross pay for the period.

Of course, doing these calculations every week will give most nanny employers a major headache! Many find it easier to negotiate an agreeable hourly rate for up to 2 children - $15/hour for example might be decided up in this situation - and simplify the accounting and bookkeeping.

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Topics: nanny payroll, nanny hourly wage, nanny overtime

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