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4 Ways to Cut Nanny Costs

Many parents love the idea of nanny care but the sticker price, not so much. Fortunately, for those parents who want their children to have attentive and personalized care by a highly qualified provider, there are ways to reduce payroll costs and make in-home childcare more affordable.

At Morningside Nannies, we’re often asked how parents can reduce the costs of nanny care without sacrificing the quality of care. While parents can opt to hire a less experienced caregiver at a less expensive rate, that isn’t always the answer. In fact, we encourage parents to consider these four ways of cutting their nanny payroll costs that don’t involve slashing the nanny’s hourly wage rate.

Pay On the Books

Paying your nanny legally isn’t optional. Yet when parents learn that paying their nanny legally will result in about 10% of the nanny’s annual income in tax obligations, many opt to pay off the books and skirt their tax responsibilities. What they fail to recognize, however, is that in addition to having to pay hefty fees and back taxes when caught, parents who pay their nanny legally have access to significant tax savings and credits that can offset those out-of-pocket expenses. In fact, in some cases, the tax savings can actually be more than the employer’s share of taxes. Using a reputable nanny tax and payroll service can ensure you maximize your tax savings.

Offer Your Nanny Health Insurance

If your nanny requests that you contribute to her health insurance premium, don’t panic. In fact, you may wish to jump at the opportunity. Contributions towards an employee’s health insurance premium are considered non-taxable income. This means that neither the nanny nor the nanny employer is responsible for paying taxes on the funds contributed to health insurance. By reducing the amount of your nanny’s taxable salary, you’re also reducing your employer tax obligation, which can save you a significant some of money.

Share a Nanny

Perhaps you’re interested in all of the benefits nanny care has to offer, but the price tag that comes with it turns you off. Consider sharing a nanny with a friend, neighbor, co-worker or family member who is also in need of childcare. While working out the logistics of sharing a nanny can be a little complicated at first, with a solid written agreement with both the nanny and the other set of parents, it’s completely manageable. You’ll cut your nanny care costs in half, you’ll still benefit from the flexibility and convenience nanny care offers and your child will reap the benefits of having an attentive childcare provider who can focus on meeting your child’s unique needs.

Hire a Nanny Turned Mom

It should be no surprise that many qualified, experienced and veteran nannies eventually become primary caregivers of their own children – and don’t want to leave their child in the care of another. Yet those same dedicated, highly referenced and exceptional nannies often have the most difficult time securing employment after they’ve had a child of the their own. Most professional nannies have experience caring for siblings and contrary to what some may believe, won’t be overwhelmed caring for another child along with their own. In fact they are used to juggling the needs of multiple children and if given the chance, most will prove that they won’t play favorites.  If you’re looking to secure a qualified nanny at an affordable price, consider hiring a nanny who wishes to take her children to work with her. Many nannies will be willing to accept a lower hourly rate considering the benefits that come along with being able to bring their child own to work with them.

If you’re considering hiring a nanny for your children but aren’t sure about the costs involved, give one of our placement specialists a call at 713.526.3989. We’re here to help you find the best solution to your childcare needs.


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