Establishing a regular recognition and reward system for your household employee(s) ensures that they feel valued and appreciated for their efforts. Paying a fair wage and benefits is the best way to show you respect and value your employee’s work, but when they go above and beyond, acknowledging them in a greater way is important. Here are some ways to recognize and reward your employee for a job well done.
#1: Give the gift of time
Time is one of the best blessings in life. Giving your employee additional paid time off is a great way to honor them and show them you care. Whether it’s an afternoon off or an extra week on top of their regular PTO or vacation, make sure you give the employee a bit of advance notice. This allows them to make plans for that time if they want, or gives them the opportunity to travel to visit family or friends.
#2: Contribute to their retirement fund
Instead of a cash bonus, you can choose to contribute to your employee’s retirement account. Whether your employee uses a traditional IRA or you set up a SEP IRA, payment into a retirement fund will provide lasting rewards well into your employee’s future. Note: Contributions to a SEP can be made between 0% to 25% of compensation up to a maximum of $58,000 (2021).
#3: Give small gifts
A simple ‘thank you,’ goes a long way. A handwritten thank-you note or lunch/dinner at your employee’s favorite coffee shop or restaurant will make her feel seen and heard. If you employ a nanny in your home, consider having the children write a thank you note, too. Small gifts from the heart are sometimes the best things you can give.
Providing a monetary bonus is one of the most common ways to recognize and reward your employee for their work in your home. Remember, if you choose to give your employee money – even if it’s just a one-time gift or a gift card– be sure you document this in your wage calculations. Any money you give your employee is subject to taxes and needs to be accounted for.
International Nanny Recognition Week is September 19th-25th. This is an ideal opportunity for you to recognize and celebrate your nanny’s work and dedication to your family. Even if you don’t employ a nanny, it’s a great idea to acknowledge your caregiver or other household employee for a job well done.
Remember that no matter what you decide to do, make sure you keep your gift ‘on the books.’ Just like regular wages, bonuses are subject to taxes. If you are not sure how to add or include your nanny’s bonus into your regular wage calculations, our experienced payroll and tax specialists at HomeWork Solutions can help. Contact us today!