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Paying Your Nanny $800 Take Home Weekly: A Case Study

Posted by HomeWork Solutions on 11/15/22 11:00 AM
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Kelley R. is a licensed social worker and a new mom. She and her husband hired a nanny so she could go back to work. After reviewing their budget, Kelley and her husband found a great nanny through a friend’s recommendation. Kelley saw no problem with agreeing to her request for a weekly wage of $800 take home after taxes, about $41,600 per year. Kelley found that getting all the reporting and tax calculations right – particularly when working from a net take home pay – proved to be a headache.


Everything seemed to be going well, until it came time to calculate the wages and taxes for the nanny’s first pay day. After several uncomfortable attempts, Kelley realized that she needed professional help with this. She did research online and by talking to other friends who had nannies, and eventually contacted HomeWork Solutions for expert advice.

HWS representatives explained exactly what her responsibilities were as a household employer, and how our service works. Kelley enrolled, and HWS assumed the tax reporting and remittance activities for her. Most importantly in Kelley’s case, we were able to do the reverse calculations working from a net take home pay to compute the nanny’s gross wage and payroll tax deductions.


Kelley and her nanny had agreed to a weekly net pay without ever doing the calculations to find out what the actual gross wage was. Essentially, Kelley didn’t know how much she had agreed to pay her nanny. She spent significant time chatting with an HWS representative so she could understand what her responsibilities were. She was aghast to learn that she had agreed to pay her nanny nearly $1,000 gross per week, or $52,000 per year, and that when her employer taxes were added to the mix, her total cost was approximately $57,000 annually.

“My HWS representative was very soothing to work with, especially when she realized how upset I was by what I had unknowingly done. Most importantly, she presented me with helpful options and solutions that balanced both my interests as well as our nanny’s.”


HWS assured Kelley that she was not the first person to have made this mistake.

Kelley now had the information she needed, so she and her husband could talk over the details with their nanny to ensure they could find a solution that everyone was comfortable with. After the discussion Kelley updated her work agreement with her nanny to reflect an agreed upon gross wage, rather than a net wage.


A few days passed, and Kelley called to let us know everything had been squared away. The nanny didn’t realize how much the taxes added to her pay. The nanny and family agreed to renegotiate the wage and meet in the middle.

“This was such an emotional problem for me – I knew my family could not afford what I had promised the nanny. Add the stress of talking about wages with the person who cares for our precious child and risk that relationship – let’s just say I was a mess. Thank you to everyone that helped me at HomeWork Solutions – they were always available, incredibly patient, and very responsive.”

Topics: senior care, nanny, nanny hourly wage, nanny wage, agency, senior, CPA

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