The end of the year is quickly approaching. Traditionally at this time of year you consider recognition for the people in your life who provide you services and traditionally receive a holiday bonus. You
are thinking about that, aren't you? In addition to the cleaning company team and your hairdresser, there's probably nobody more deserving than family employees such as your nanny or senior care worker. After all, they're the unsung heros of your household.If you hadn't considered giving your nanny or senior care worker a bonus, we'll explain why you should and show you how. If a holiday bonus has been part of your end-of-year routine, we'll share some norms with you to help you evaluate the amount to give.
Note: For the sake of clarity, we talk about the nanny for the duration of this article. You will use the same guidelines for senior care workers.
Your nanny cares for your children day after day, providing you both flexibility and dependability in your child care, and in short simplifies your life. Your nanny is an important member of your household. So, unless you're facing a financial hardship, you should consider giving your nanny a holiday bonus — it's the right thing to do. A recent study showed only 3% of families didn't reward their regular nanny at all at the end of the year.
If you're planning on letting your nanny go because of poor performance or for personal reasons, it's acceptable to skip a bonus. In this case, it would send the wrong signal and raise your nanny’s expectations.
Now that you've decided to give you nanny an annual bonus, the question remains: what to give? Hands down the best answer to this question is CASH. While it may seem impersonal, a poll of nannies showed cash was their number one choice for an end-of-year gift. Their second choice was a gift card from a place where it could be used for multiple types of items, such as Amazon.com or American Express.
If you're planning on giving your nanny an annual bonus but are unsure how much to give, the most common answer is to give at least one week's salary. A number of variables may determine the appropriate amount of money to give, however.
If your family's economic circumstances prevent you from being able to pay the standard bonus, the important thing is to acknowledge this to your nanny. Your nanny is generally very sensitive and aware of family situations, and she will most likely understand. Instead of giving the payment all at once, you might try breaking it down into smaller amounts over a period of time.
If you can't afford a bonus due to financial hardship, here are some suggestions for gifts you can give in lieu of cash:
Most good nannies develop a strong bond with your child. You may wish to consider a personal gift, such as photo book, a scrapbook, or a keepsake such as a locket with your child's photo that reflects their relationship. Involve your children - this not only models gratitude to them, it also makes the gift more meaningful to the nanny.
Your nanny's holiday bonus is considered to be taxable income, and you must report and pay taxes on it. Many families don't realize that even the dollar value of a gift card must be reported as income. Since you're an employer, your bonus doesn't qualify as a gift. A full discussion on the tax issues surrounding nannies and bonuses is outside the scope of this article, so make sure you talk to a nanny tax expert to review the tax ramifications.
An appropriate cash bonus will let your nanny know they are appreciated. It's a win-win situation. You'll be letting them know how thankful you are for the fine job done, while at the same time, you'll be giving them an incentive to continue providing loyal and dependable care for your family.