Nanny Holiday Appreciation … Bonus? Paid Time Off?

Timeless holiday songs are once again playing on the radio, that festive spirit can be felt in the air and year end celebratory planning can be found everywhere … This is one of my favorite seasons of all. It is that special time of year when we take the time to appreciate the wonderful people in our lives, and take a moment to show our appreciation to those special people that make our everyday lives better. We all start to feel that holiday spirit this time of year!

Many families incorporate this spirit into their household employment relationships as well. If you have a nanny, senior caregiver or other household employee, now is the time to consider how you might demonstrate your appreciation to your employee ...

Am I required to give my nanny a holiday bonus? The simple answer is no, you are not required to give your employee a bonus; but it will certainly be greatly appreciated. Bonuses are a gift to employees as recognition of a job well done, and although they are not required, employees love to receive this recognition.

What kind of bonus should I give? There are not hard and fast rules – whether to provide a bonus or not, as well as the amount is a very personal decision. Many clients base their bonus amounts on the time the employee has been working with them. Longer term caregivers – more than a year on the job – typically receive cash bonuses equivalent to one or two weeks of wages. For caregivers with less than a year of service, the calculus is often a cash bonus equivalent to one day of pay per month of service, generally no more than one week of wages in total. A gift card is also a great option, as they can be purchased for your employee’s favorite store, and it adds a personal touch.

Additional paid time off in lieu of a monetary bonus is one way to show appreciation without increasing the household payroll expense. Many families have time off from work around the holidays, and often gift their nanny with some extra paid time off. Your nanny will appreciate advance notice if you plan to do this so she can make plans for her bonus time off.

There are many ways to show your appreciation, ask your child, and get him/her involved. I am sure you will be surprised with the creativity of your little one- PLUS, you are teaching your child to show appreciation and be thankful!

Remember – In the eyes of the IRS, there is no gift between employer and employee. Any kind of bonus you choose to give your employee must be reported for tax purposes and reflected on your employees W-2.

The gift of recognition – Maybe a monetary gift to your household employee isn’t in your plans this holiday season. A thoughtful card or extra words of thanks are great gifts as well. Recognition matters, and the holiday season and start of a new year are the perfect opportunities for you to share your appreciation!