4 Reasons to Give Your Nanny a Raise

Many parents wonder when it’s appropriate to provide their nanny with an increase in salary. While employers are not under any legal obligation to offer their employee’s a salary increase, most realize to attract and retain high quality employees, doing so is required.

Parents typically provide their nannies with an increase in pay for four main reasons. These reasons include: to compensate for a cost of living increase, to adjust pay to reflect compensation for an increase in duties, to increase pay to care for an additional child and to acknowledge a job well done.

1. Cost of Living. Wages are generally adjusted to account for inflation and local pricing. In the corporate world, cost of living increases are often based on the Consumer Price Index. Cost of living increases are typically given once per year and account for a two to three percent pay increase.
2. Increase of Duties. While a well drafted written work agreement addresses a nanny’s duties and responsibilities, occasionally after employment has begun, minor changes to the agreement need to be made. If the nanny’s duties and responsibilities are increased, her pay should also be increased. For example, if you’ve decided you’d like your nanny to take on household management duties but only hired her to take on child related duties, an increase in pay would be appropriate.
3. Addition to the family. Unlike daycare centers, parents pay a nanny per family, not per child. However, if a child is added to the family during a nanny’s contract, a pay increase is warranted. Typically parents offer a five to ten percent pay increase when the nanny is responsible for caring for an additional child.
4. Merit. Like other types of employees, nannies are rewarded for outstanding performance with a merit raise. Typically occurring after a yearend review, parents, on average, provide a five to seven percent merit raise increase per year to nannies who have provided excellent service.

Some parents and nannies opt to include clauses on raises in their work agreement so that the nanny understands what type of pay increases she may be eligible for. Since raises aren’t required, other parents prefer to address opportunities for increases as they arise. However you choose to address raises, compensating your nanny fairly and rewarding her for a job well done will always be appreciated.

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