Many families have busy schedules and some parents work non-traditional hours, requiring child care often when daycares, schools, and other options are not available. For these reasons, and sometimes for the sake of convenience, some families opt to have their nanny live with them. While our agency can assist with the hiring process, our payroll and tax partner GTM Payroll Services has put together this guide of everything families should consider when hiring a live-in nanny.
If you’re seeking in-home care for your children, you may be wondering whether a live-in nanny would be the right choice for you.
A live-in nanny doesn’t need to commute to your home so you don’t have to worry about your caregiver getting stuck in traffic and arriving late for work. They may even be able to take a more active role in your morning routine especially if you need to get kids off to school or dealing with a baby who was up all night.
A live-in nanny may also provide more flexibility for parents that need to work late, frequently travel for work or have non-traditional or varied work schedules (like a surgeon who is on-call). Live-in nannies still need to be paid for all hours they work (we’ll get into pay rates and overtime) but they may be better able to handle any changes to your schedule if they live in your home.
Considering a live-in nanny is not a decision to be taken lightly. Think about the benefits and drawbacks of having someone outside of your family living in your home. You’ll gain flexibility but you’re also giving up some privacy.
If your child has medical issues and needs specialized care – perhaps even around the clock attention – you shouldn’t hire a live-in nanny as a solution. They may not be able to provide the proper supervision and protection your child requires.
Finding the right nanny
It can be difficult enough to find an ideal caregiver for your children even when your employee doesn’t live with you. You need to find someone who is trustworthy, responsible, experienced, and connects well with your children among other qualities.
To have this person live in your home brings on another set of complexities.
Will they mesh with your lifestyle? Do you need to change any of your routines or habits? What about their habits and mannerisms?
You need someone who will not only be a loving caregiver for your children but also be well-suited for your home. They should know how you run your home and fit in with the rest of the family.
You may want to talk to other families that have had live-in nannies to understand their challenges and how they made the arrangement work both for them and their employee.
When hiring a live-in nanny, you may want to perform a more in-depth background check and ask for additional references including from families that they have lived with.
Your live-in nanny candidates are also evaluating you during the hiring process. They’re looking for an employer who is fair, honest, and trustworthy.
Everything mentioned in this guide – including duties, accommodations, schedule, pay, benefits, expectations, house rules, and more – should be included in a work agreement or nanny contract. With a live-in nanny, you have other considerations that should be spelled out and communicated to your employee. Some questions to think about:
- Will you pay for their food, cable TV, Internet, etc.?
- Shared spaces
- Will they have their own pantry and refrigerator or will they be able to store their food in the family kitchen?
- Will they be allowed to use your washer and dryer for laundry?
- Will they be allowed to use your backyard, pool, etc. when they’re off the clock?
- Will they use your car or need one of their own?
- Will they be allowed to drink alcohol or smoke in your home?
- How clean will they need to keep their private living quarters?
- Are visitors including overnight guests allowed?
- Will they have a curfew on worknights?
- What is an acceptable noise level?
Your live-in nanny’s main responsibilities will be the same as if they lived out. They’re in your home to care for your children. They’ll prepare meals for your children, clean up from their day, and do your children’s laundry if there was an accident or a particularly messy activity. Live-in nannies are not there to do your laundry, clean your home, or tend to your personal or business affairs. If you need those duties filled as well, you may need to look for a nanny/housekeeper or an additional employee as your personal assistant.
Once you’ve created a work agreement, review it with your employee and make sure you’re on the same page and that there are no misunderstandings. This will help alleviate any miscommunications down the road.
As part of your nanny contract, you’ll want to include a non-disclosure agreement (NDA). An NDA can provide a level of protection and privacy for your family. While you may feel like you can trust your nanny, just think about what they have access to during her day. They may come across personal information such as prescriptions, bank statements, bills, purchase receipts, and more. Your nanny will see you at your best and, unfortunately, at your worst. They may overhear sensitive or intimate conversations. It’s those private and “not so great” moments that you don’t want to be shared as nanny chatter at the park, on message boards or through social media.
You should discuss confidentiality and privacy before they start working for you to reduce miscommunication but also put it in writing.
At the very least, a live-in nanny is provided a private, furnished bedroom in your home. They shouldn’t share a room with your children. Most live-in nannies also have access to a private bathroom and some even have a separate kitchen and living area. Whatever the accommodations, your employee needs privacy when they’re off the clock.
Your live-in nanny will likely share meals with your family (especially if they don’t have their own kitchen) and have access to your food. They can be expected to pay for their own food if it’s something you normally don’t provide to your family.
Most importantly, your live-in nanny must be comfortable with the room and board arrangements you’re providing as part of the job.
A live-in nanny typically doesn’t work any more or less than a live-out caregiver. They’ll usually work five days a week and receive two days off. Live-in nannies should still receive PTO, paid holidays, and vacation time as you would normally provide a caregiver.
Live-in nannies are not always on call unless you want to pay them for those hours. However, live-in nannies can provide overnight supervision if you’re traveling for work or additional help if you’re adjusting to having a new baby in the home.
Just remember that it’s easy to blur the lines between work and non-work hours when your caregiver lives with you. It’s important to respect their schedule and not expect them to be at your beck and call.
A live-in nanny should receive the same rate of pay you would consider for a live-out caregiver. The fact that they receive room and board shouldn’t lessen their pay.
According to the International Nanny Association’s 2017 Salary and Benefits Survey, the national average hourly rate for a full-time nanny is $19.14/hour. There wasn’t much difference in pay rate for live-in and live-out employees.
Live-in nannies are considered hourly workers and need to be paid the highest applicable minimum wage of the federal, state, and local rates.
As mentioned, they are paid for all hours they’re on duty and “on call.” If your live-in nanny needs to be at your home and isn’t free to leave, then they need to be paid for those hours.
You may be able to exclude sleep time if, for example, you’re traveling for work and your nanny is taking care of your children around the clock. Up to eight hours per night can be excluded. However, any interruption to their sleep time must be paid. If during the night, your nanny doesn’t get reasonable periods of uninterrupted sleep totaling at least five hours, then you may not exclude sleep time.
Deducting room and board
According to the IRS, families who employ a live-in nanny can exclude the cost of room and board from their nanny’s pay as long as the meals and housing are provided in the family’s home, for the family’s convenience. If you choose to deduct this amount from your nanny’s wages, you still must pay them an hourly rate at or above the prevailing minimum wage.
In some states, like Massachusetts, you aren’t allowed to deduct the cost of housing from your nanny’s pay if the job requires them to live in your house. You may also be deemed a landlord if you take room and board out of your employee’s wages because now your nanny is considered to be paying rent. You’ll need a landlord-tenant agreement along with a nanny contract.
Most live-in nannies are exempt from overtime pay. Any hours worked over 40 in a seven-day workweek are paid at their normal hourly rate. However live-in workers in several states – including California, Hawaii, Massachusetts, Maryland, Maine, Minnesota, New Jersey, New York, and Oregon – are required to be paid overtime when they exceed a certain number of hours in a day or workweek.
Tax, wage, and labor laws
Besides minimum wage rates, overtime, and sleep time, there are other tax, wage, and labor laws you’ll need to follow. These include:
- Deducting Social Security and Medicare (FICA) taxes from your nanny’s pay (7.65 percent of gross wages)
- Paying the employer share of FICA taxes (also 7.65 percent of gross wages)
- Paying federal and state unemployment taxes
- Providing your nanny with a W-2 at the end of the year and filing Schedule H with your personal tax return
- Purchasing workers’ compensation if required in your state
- Contributing to and/or withholding pay for any family and/or medical leave requirements
- Following any other state regulations that pertain to household employment
- Complying with a domestic workers’ bill of rights if one is applicable to your state or city
GTM’s Nanny Tax Guide you help you every step of the way when paying your employee, withholding taxes, complying with labor laws, and more.