How much of a pay increase to give our PT nanny?

KDR1979 · September 2014

When we found our nanny (amazingly on care.com), she was hoping to make $15-20/hour. She is in her late 50's, has a bachelor's degree, and is a professional nanny. She is amazing. We absolutely love her. She works two 11 hour days for us. We negotiated with her and pay her $14/hour b/c she preferred that we use a payroll service (Nannychex) so her pay is directly deposited. We also became official "employers" with our state, so we pay taxes on her income and pay a fee to use NannyChex. We also pay for worker's comp. So, we told her that it averaged another $2/hour with those expenses and she agreed to take $14/hr start. She gets 3 weeks of unpaid vacation, but if we go on vacation, she still gets paid for her 22 hrs/week.

So, 10/1 is her 1st anniversary with us. I have been planning on giving her a 5% raise. Most of my jobs have given a 1-5% raise per year. 5%= 70 cent raise. I don't know if we can give her a 5% increase every year though.

Anyone else have any experience with this? What kind of raises do Nannies expect???
Thank you!

KDR1979 · September 2014

She really likes direct deposit. We did compare what a CPA could offers us before signing up for NannyChex. Nannychex creates her W2 and also creates our tax documents & makes it really easy for our CPA to do our taxes. Even the CPA thought Nannychex was better.

It is pricey, but since we have twins, we'll have our nanny for about 5 years and then our kids will be in school full time and should only need after school care 2 days/week. When our kids are 5-6, our nanny will be ready to retire.

shakinros · September 2014

You only pay $14/hr for twins?! For a nanny you really like? That's a steal, even with the extra cost of employer payroll taxes. Go to $15/hr. Tell her upfront you can't do that every year - if there's a raise next year, it'll be more like $0.50/hr (or whatever you want to say about it.) And just say you wanted to communicate how much you value her by getting her hourly rate into the range she originally wanted.

KDR1979 · October 2014

@ Shakinros, we're in Cincinnati and pay our nanny more than any other friends that we know with nannies in the area!! I know prices may vary based on location. We gave her a nice review and told her that most of our jobs have given 0-5% raises/year. 3% is typical and 5% is reserved for excellent employees. We gave her 5.3%=75 cents. She was really happy with it. We told her that we probably can't do that every year and will probably increase her by like 50-75 cents most years from now on. She'll probably be making $16-17/hour in her final year with us.

Thanks for your help everyone.

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