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

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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