How Much Does it Cost to Hire and Pay a Nanny?
What are the real costs when hiring through our agency?
When hiring and employing a nanny, there are many factors to consider that go beyond wages. Here is a guide to some of the potential expenses you should be aware of when employing a domestic worker.
Nanny Costs
Weekly pay rates
Live-Out Nannies
- $800-$1200 per week
Live-In Nannies
- $500-$900 per week, plus average of $50 per week for utilities and food
Agency Costs
Live-Out Nannies
- $400 application fee
- Annual fee: 12-15% of gross compensation or $1600 minimum (whichever is greater)
Live-In Nannies
- $400 application fee
Short-Term Fees
Placements
- $300 annual membership fee
- $250 emergency backup care membership fee
Agency Fees (per placement)
- $40-$55/day (based on advanced notice)
- Emergency Backup care: $60
- Holidays: $50/day
- Pay rates: $18-$25/hour
- Overnights: $100/night
- Tutoring: $30/hour
Legal Obligations
Overtime
- Time and a half for hours worked over 40 in a seven-day workweek (over 44 hours for live-in workers) in New York
Employment Taxes
- Taxes are 7.65 percent of wages for Social Security (6.2 percent) and Medicare (1.45 percent), if employee is paid more than $2,800 (2025)
- Federal unemployment taxes are six percent on the first $7,000 in wages, if employee earns $1,000 or more in a calendar quarter
Workers’ Compensation, Disability, and Paid Family Leave
- Workers’ comp coverage required for employees working 40 hours or more per week (live-in and live-out employees)
- Disability and paid family leave required for all employers in New York
- Average cost for all three coverages: $1400/year
Optional Expenses
Payroll and Tax Service
- GTM Payroll & HR can take care of your payroll and taxes for $70/month.
Employee Benefits
Health Reimbursement Accounts
- Average cost: $465/year plus tax-free contributions
Health Insurance Policy
- Average cost: $1200/month
Flexible Spending Account (FSA)
- Average cost: $250 setup, $50/month
Health Savings Account (HSA)
- Average cost: $250 setup, $50/month
Retirement Plan
SIMPLE 401K Plan
- Potential pre-tax savings via payroll deferral of up to $16,500
- Employer cost: $100 annual membership fee, plus your contribution to the 401K
Bonuses and Perks
Holiday bonuses are typically 1-2 weeks’ salary. Other expenses may include entertainment/activity fees and mileage reimbursement.
Keep in mind this information is to be used as a general guide – costs of insurance and employee benefits are estimations and will vary.
For more information, contact us at (518) 348-0400.
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