Nanny Contracts Part 2 : Setting Wages

Here with another segment of Nanny Contracts 101. Today I want to talk a bit about setting wages.

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For the most part, when families are looking to work with an in-home caretaker for their kiddos, they are hoping to form a long-term connection with this person. It’s likely everyone has gone through a long vetting process, boundaries have been discussed, philosophies on care clearly stated (hopefully), and so on. There’s a good deal of understandable nervousness and tension around bringing an outside person into a family or becoming that person with so much responsibility. It’s a big deal and it should be! This is why I stress so much (as do the folks responsible for the Domestic Worker’s Bill of Rights in NYC and beyond) that in home care workers have contracts. Setting these terms out clearly can go a long way in building solid, honest, caring, and long-term care situations. 

It is also important for everyone to be on the same page about a nanny’s role as an employee. The cost of childcare in the U.S. is incredibly high, as is the cost of living in many areas. Having said this, if a family wants a committed care provider who is able to devote the necessary compassion, energy, and attention the want for their children, they have to look at the needs of the person they are charging with that role as someone who needs to ALSO keep up with the rising cost of living in their community. 

The first step in doing that is setting a reasonable salary to begin with. One tool you can use (both nanny and family) is the HUD Median Family Income and HOME Income charts, as well as this breakdown of the poverty level as defined federally and statewide. Keep in mind that Domestic Workers are taxed at around 40% and have few tax deductible items through the year. Using that data, what is the salary you are comfortable having/providing? 

For example, in San Francisco, the median household income for 2019 is estimated to be $136,788. If a nanny without their own children works 40 hours a week at $20 hour 50 weeks out of the year, at a salary of about $41,000 before taxes they are making just above 30% of the median income in that city, which is often the limit for receiving federal or state assistance. Keep in mind also that 93% of units for rent in San Francisco go for over $2,000 a month, the bulk of which are over $3,000 per month. 

Shockingly, the average hourly rate for nannies in San Francisco, according to many online salary snapshots is around $17 an hour, netting the nanny $2,720 (about $1,000 of that going to taxes) a month for full time care work, which is about 40% of the median income for a household of 1 and barely over the average cost of apartment rental in the same city, even pre taxes. 

There are other parts of the country where the cost of living is significantly lower and rent takes up a somewhat smaller portion of expenses. This is why it’s a good idea to look at the data for your specific community when factoring how much to charge / pay for nanny services. 

As a nanny, you’ll need to factor in a number of things around how much you are needing to charge :

  • Is this going to be your primary source of income?

  • Do you have another working person in your household who helps support you / your family?

  • Where does your rent fall in the average for your area?

  • Will you be working full or part time?

  • Is this going to be a long or short term contract?

  • What advanced skills do you have to offer?

For families, in addition to the basic considerations like how many children and how old they are, you’ll also need to consider some of the following when offering rates :

  • What requirements are you looking for in a nanny -- Advanced degrees or training? Added certifications? Not working other jobs? X years of experience? 

  • What sorts of tasks/etc. are you requiring of your nanny -- Additional housework? Having their own car? Setting a family’s schedule? Cooking? Taking the child(ren) to specific activities? Pet care?

  • Will you offer additional perks like health insurance, covering their taxes, paid sick leave, paid vacation, bringing their own children, options for bonuses and raises, etc.? 

  • Will you offer them room and board (au pair or live-in nanny situation)?

  • Does your employer offer to cover some or all of your childcare expenses? 

Rates may or may not be negotiable on either end. It can be a good idea to interview a bit outside of your range requirements to see if there is a good fit in terms of connection and see if there can be some negotiation in either direction for finding a solid fit, but keep in mind, “good vibes” can’t pay the rent, not even in the city of groovy. 

It’s important to look at the process of setting responsible and appropriate salary rates not as something scary, intimidating, or confrontational, but as a means for showing respect for both parties, and offering an avenue to grow together in this important work. Be open and honest about your needs -- both nanny and parents -- to ensure the likelihood that this relationship is set on solid ground. 

Once terms of payment are set, make sure to include them in a contract. Beyond the rates, you’ll need to work in the way in which payments will be made as well as how often, and whether taxes will be taken out now or later. Any incentives -- financial or material -- should be in writing as well. 

Any job with a longer contract should have an open possibility for income adjustment, based on performance and/or inflation, and nanny care is no exception. The Social Security Administration releases a Cost of Living Adjustment report annually, with projections for the following year that can help you set the terms of raises and salary adjustments. There are several different ways to work this into a nanny contract, based on any number of personal factors related to your individual relationship between nanny and family. As long as it’s in writing and offers clear, but flexible language, the possibilities can remain broad and respectful. 

No matter how you set your terms, the process of coming up with these boundaries can be empowering for all involved if done thoughtfully. 

If you are looking for help writing a nanny contract for yourself or your family, I offer a wide range of services to aid in the process. You can learn more about those packages by visiting my Nanny Contract page here, or arrange for a 20 minute nanny contract consult by emailing me at I look forward to working with you! 

Nanny Contracts Part 1 : For the Nanny

According the the US Bureau of Labor Statistics, there are over 1.2 million nannies working in the US, with an average growth rate of 7% per year, plus the steady stream of job openings due to care takers leaving for similar or more skilled occupations regularly. 

Unfortunately, the value of childcare in this country is dismal. It’s become a political talking point amongst conservatives and progressives alike, but little has changed in the reality of in-home care being an under regulated, underpaid, undervalued job sector. Though many nannies are working full time and are asked by the families they work with to have some level of education and advanced certification (such as CPR and First Aid, more if working with very young children) like care providers at daycares and preschools, they are rarely paid as well or given considerations like sick days or paid vacation days. They’re often paid under the table, which has some benefits for some, but can cause complications for many career nannies. 

In some areas, nanny agencies, both open hearted and predatory, have emerged to fill in some of the gaps in communication and regulation between family and care provider. The best of them provide certifications, career support, arbitration, and financial protection for the nannies while providing security and ease of service for families. The more unsavory agencies charge exorbitant rates, skim large amounts off the top (usually meaning the nannies get paid pennies on the dollar), provide little more than head hunting services, and have themselves tightly bound legally so that they don’t have to extend their involvement in contractual or legal issues beyond terminating the agreement. 

No matter how the arrangement is first formed between nanny and family, one massively undercooked component of forming a safe, healthy, mutually beneficial, and long-term relationship is in having a solid contract. 

I find that when I am working with doulas on their client contracts, they often are afraid of adding much of anything to their documents out of fear that it will seem aggressive, or like they are accusing their clients of the worst at the onset of the arrangement. I always urge them to consider the opposite — that having the chance to talk about expectations sets the stage for talking about positive aspects of the agreement foremost, while possibly protecting you from potential arguments later down the road. As professionals and parents, no one should fear honest conversations around frameworks of care.

For you as a nanny, you should have already taken the time to consider your needs — financial, physical, in scheduling, with regards to communication style, etc. — before starting to take interviews. Not that these things can’t shift if you find the right match otherwise, but it is an essential practice when applying to a job in any profession to form an opinion on these things beforehand.

Coming into negotiations — and there’s no reason to brush over the fact that even in this caring profession, you are negotiating your needs as a business person in the interviews and hiring process, so don’t shy away from it — with your needs already defined for yourself will help you seem committed to the work, easy to work with, that take your work seriously (which should be a strong selling point for any parent leaving their children in your care), and are open to communicating honestly. These are all assets in care work, even if they aren’t what’s typically highlighted in discussions around nanny requirements. 

In terms of working with a contract, it is still not common practice for families to do so. You may need to take the initial leap of suggesting one be made. You might also want to make the initial step of presenting a family with something you wrote in advance. It can be a strong component of your interviews to bring a sample contract along. There’s no reason to view that as an affront or aggression, so don’t deliver it hesitantly. You can confidently speak to how you came about choosing the terms within it, offer it as another way you are helping take some stress off parents by having these terms worked out in advance, and remind them that this is just the first step in the negotiations and that you may be amenable to components of the contract pre-hire and perhaps even as the relationship develops. 

Again, on the note on feeling hesitant that families might react poorly to such a move, I want to suggest that that situation might signal a red flag anyway. If that family does not see the contract in it’s essence (so that’s not to say that they have particular issues with what’s in the contract, which might be amended after talking it over more) to be a promising sign, it might be that they don’t want to see you as a working professional of value and you may have issues around your needs as things move along. This is particularly true if this work is going to be full-time and / or your sole source of income, but it is true regardless of those things, too. You are going to be expected to give a high level of care to their children, so they should treat your role with a high level of respect. Period. 

Now, having said that, you are unlikely to get a positive response from many families if your contract is a copy and paste document with difficult, technical legal language which neither party fully understands. I say this constantly with my students and mentees — If neither party understands what they’re signing, neither party is truly protected. 

Same for if the bulk of the contract is covering liability alone. Paragraph after paragraph of what you are NOT liable for still, quite honestly, can only protect you so much (no matter how often you say “not liable,” you can still be tried for gross negligence) and can set the stage for a tense relationship. To put it bluntly, no one wants to start a relationship on having to read three pages of legal language around dead babies. You should consider some terms of liability, but you should also purchase (or have the family cover for you) liability insurance, which you can make note of in your contract in simple and effective language. Having a statement of Scope of Practice and approved services rendered goes a long way in covering liability concerns, too, so make sure you consider what that will look like in advance. 

Nor should your contract be exclusively about getting paid. That is an issue I come across with doula contracts constantly — they are often one page documents with a paragraph about liability and six paragraphs about payment and that’s that. Though it is important that both issues are addressed in your contracts, it’s important for the contract to express the nature of this relationship as a two-way street, which means that you need to offer your scope and accountability as well as the ways and amounts you wish to be paid. 

Addressing both those concerns with clear, simple, firm language will hopefully help stave off some of the anxieties around contract negotiating feeling overtly aggressive or lopsided. 

Beyond those elements, some things to consider either putting directly into your sample contract from the outset or at least having a formal offer to present in writing are :

  • Handling Illness — Missed days and otherwise

  • Vacation Days

  • Health Insurance

  • Car Usage

  • Reimbursement Methods for Accrued Expenses / Per Diem

  • Backup Providers

  • Cancellation and Rescheduling Terms

  • Performance Review and Raises / Bonuses

  • Taxes

Returning to the subject of working with an agency, it is important that you consider those terms if you have the umbrella of an organization, too. Some agencies are more hands on in their contracts — setting the terms of expectations — while others do little more than pairing families with nannies and remain hands off regarding how the relationship unfolds. 

If you are working with a more interactive agency, it is totally fine to negotiate your contract to include certain terms that work well for you. Professionals do this all the time when starting new jobs, and if you are a professional nanny, you should have the option to do so, too. If they won’t budge and these terms are important to you, you can figure out having an addenda (aka an added form) to you contract that you sign with the family (there are specifics on how to make that legally binding you’ll have to consider) or it might mean that you are going to have to find work outside of this particular agency. It is important, too, that you read over and discuss the contract that you have with the agency itself to make sure you are getting a good deal and are offered some accommodation in what they’re providing at cost. And I cannot stress this enough, when working with an agency, you should read and be privy to signing EVERY contract between you and the family, not just a contract between you and the agency. You are an independent contractor in this scenario and you are going to be held the most liable in the case of an unfortunate event, so you must be able to see what you are signing onto and be part of that negotiation of accountability and action. If an agency fights you on that front, it is unlikely they understand the best interests of the care provider and it might be a good idea to look for work elsewhere. 

If you are working through an agency that is more on the matchmaking side, you should still be able to have an independent contract with the family. You might have a tremendous amount of flexibility and control in this regard, but it’s a good idea to check back in with the terms of the pairing service. 

Okay, so I hope that helps you feel more confident about your ability to take charge of your career as a nanny and to put it in writing. 

I offer Nanny Contract Writing packages and consultations, so please reach out if you have questions about how I might be able to help you. You could also consider checking out my booklet Contract Writing for Doulas (and Other Birth Workers), which dives deeper into these issues and more, much of which is very applicable for any in-home care provider. My workshops, too, can offer you a chance to sit and edit or draft your contracts in real time and leave you with some hard questions answered, so come on and join us doulas anytime. 

Good luck!