If hiring a full-time nanny is not in your budget, a nanny share can be a great solution. Nanny shares are commonly used for working families in need of reliable childcare but looking to keep the costs down.
Most nanny shares include two families who both hire a nanny and split childcare services/costs among the group. Because the nanny will be fulfilling the needs of two families, the nanny’s wage is generally 20-25% higher than a single family rate. For example, if the going rate to hire a nanny for one child is $20 an hour, the share cost would be $24 to $25 an hour. It’s important to note that even though the hourly rate is higher, the cost split amongst the family is still a lot less than it would cost to hire a nanny for just one family.
Both families should work together with the nanny to determine what supplies will be needed. Will the family dropping their children off at the host family's home need to bring a bag with daily supplies such as meals, snacks, diapers, changes of clothes, and leave a car seat? Will the non-host family provide a second set of supplies to be kept on site? Presuming the host family will just absorb costs, and let the non-host borrow whatever is needed can lead to conflicts down the line. Memorialize what the expectations are for each family, and what duties the nanny will provide to each family in a written work agreement.
Both families will be considered employers under the law. Each is independently responsible for paying employment taxes on the wages paid by their family to the nanny. Paying wages under the table is never a good option, as it is strictly prohibited by law, and could lead to hefty fines later down the road.
Nanny shares are a fantastic option to give your child loving, attentive care during times you are away. However, it is important for you to do your research on what a nanny share involves and ensure you trust and get along with the other family you are working with. This is essential to making sure everything goes smoothly.
If you are unsure how to calculate taxes on your nanny’s wages, our experienced team at HomeWork Solutions can help. Contact us today to get things up and rolling for you.