Do-it-yourself guides for hiring a nanny, paperwork, and the nanny tax

The Utlimate Guide to Hiring a Nanny Yourself

Here is a summary of the steps we took to hire a nanny. Look further below on this page for detailed information about the individual steps.

  • Consider the pros and cons of different childcare options: (1) daycare center, (2) stay at home dad/mom and help from family, (3) nanny, (4) nanny share, (5) home daycare.
  • Calculate the cost of different child care options and make a decision what option(s) to pursue.
  • Get clear about what you are looking for.
  • Start the search process.
  • Refine your cost estimates taking into consideration rates you discovered in your search process.
  • Decide how to hire the nanny. The options are either a nanny agency or the do-it-yourself way.
  • If you want to go down the do-it-yourself way, contact candidates. Search for nannies using Web Sites, email lists or personal network.
  • Prepare for and conduct the interview process.
  • After interviewing and narrowing your selection, consider doing a background check.
  • Call up the references you got during the interview process. Our opinion is not to trust written references too much. Search the Internet for red flags about a person.
  • Extend an offer to a nanny and wait for the acceptance of your offer. Repeat if necessary.

Child Care Options

There are these main childcare options, which are compared below: (1) daycare center, (2) stay at home dad/mom and help from family, (3) nanny, (4) nanny share, (5) home daycare, (6) part time stay at home parent plus help from family. Let's look at the advantages and disadvantages for each of these:

  • Daycare Center.
    • Advantages.
      • Can be less costly than a nanny if you have one child. With two children or more, the cost benefit dwindles.
      • Interaction with other children.
      • Payment and taxes are easy. You won't need to hire a household employee and won't have any paperwork.
      • If it is an accredited, high-quality daycare center, the teachers will be very experienced and there is a curriculum of learning for your child.
      • Food and drinks are typically provided by the daycare center. So you will have to do less shopping and think less about meals and food.
    • Disadvantages.
      • Might not be appropriate when you have a baby that is very young.
      • Finding an opening in a daycare center can be difficult. Often, there is just no opening in the daycare center of your choice. Or a very long waitlist.
      • Your child might get sick more often.
      • When your child is sick, a parent needs to stay home or you need to organize other forms of childcare.
      • Less control of the day and what your child does compared to a nanny or stay at home parent.
      • Staff might change quite often with people leaving and new teachers starting. Less consistency.
      • Daycare center can be very expensive. Especially if you have more than one child.
      • Less attention depending on teacher/child ratio. There can be quite a lot of children in a class.
  • Stay at home parent.
    • Advantages.
      • You can build the closest and most intimate relationship with your child.
      • Bonding with you child, especially when he or she is a baby.
      • You can give your child all the care and love as you find it appropriate. You have full control of what happens to your child over the course of the day.
      • Fulfillment for yourself. If staying at home and taking care of your children is part of your life goals.
      • Can be the cheapest option, depending on how many children you have, what you currently earn, and what you think the impact of staying at home has on your long-term earning potential.
      • Your child likely will get less sick compared to daycare.
    • Disadvantages.
      • Reality in today's America is that two incomes are required to manage cost of living expenses. So, one parent staying home might just not be an option.
      • Staying at home to take care of children is a lot of work. And you might not like it and want help.
      • Staying at home with your children might just not be part of your life's goals.
      • You lose one full income for the time you stay home. And you staying home might impact your career and long-term earning potential.
      • Regret that staying at home forces you out of or delay your career. Depends on your personality. Regret can settle in later and cause conflict for you and your relationships.
  • Nanny.
    • Advantages.
      • More control over who takes care of your child.
      • Convenience. A nanny typically takes care of washing and folding babies' clothes, maybe even shopping and cooking for all of your children's meals.
      • Nanny might help with more household chores.
      • Can be cheaper than daycare or stay at home parent, depending on how many children you have.
      • Your child likely will get less sick compared to daycare.
      • Nanny might be the only available option between when you have to return to work and a daycare opening becomes available.
    • Disadvantages.
      • Can be expensive compared to daycare center or nanny share if you have only one child.
      • You need to handle all the paperwork involved in hiring and paying a household employee. You essentially become an employer, which means paperwork.
      • Finding a good nanny can be difficult.
      • Trust issues. You are handing over your children to a person you hardly know at first.
  • Nanny Share.
    • Advantages.
      • Can be a great cost-effective way to have a nanny.
      • Fewer children compared to daycare can mean your child gets more attention.
      • Your child will likely get sick less often compared to daycare, as there are fewer children your child interacts with.
      • You still have a lot of control over what the nanny will do with you child. You can influence the curriculum of what they learn.
      • The nanny might still be able to help with other chores like laundry for the children. Depends on the number of children.
    • Disadvantages.
      • You must find another family to share the nanny with. This in itself can be very difficult, as there needs to be a lot of trust not only financially but also when it comes to setting priorities for your nanny. There can be conflict because of this.
      • You still will be the employee of the nanny, which means paperwork.
      • The children in the nanny share might be of different ages. This means targeting the age-specific needs can be more difficult for the nanny.
      • Your child likely will get sick more often compared to you staying home or having your own nanny.
  • Home Daycare.
    • Advantages.
      • Typically cheaper than a nanny.
      • No paperwork, as you don't become an employer.
      • Tries to combine the advantages of a daycare center with a more family-based, homelike setting.
      • Typically offers more stability in who takes care of your child compared to a daycare center. In a daycare center, teachers might leave and other teachers are hired more frequently than in a home daycare setting.
      • Groups are typically smaller than in a daycare center.
    • Disadvantages.
      • Your child likely will get sick more often compared to you staying home or employing a nanny.
      • Less control over the day of your child.
      • Home daycare is often less regulated/accredited than daycare centers you can find.
  • Working part time with help from family.
    • Advantages.
      • Works well for the time your baby is very young until you can go back to work full time.
      • Trust. You know your family, and it is easy to leave your children with grandparents, as you know they have a shared goal and love for your child.
      • Working part time let's you keep participating in your job and career. Makes it easier to go back full time one your baby is a little bit older.
      • Very cost effective. Both parents still work and bring in money. You typically don't have to pay if your family helps temporarily for shorter amounts of time.
      • No paperwork as you do not become the employer of anybody.
    • Disadvantages.
      • You need to have family living close by and a grandparent willing to help in a very substantial way raising your children.
      • A grandparent is not your employee. So, there can be a lot of conflict with this model when philosophies about raising your children are not shared. Your relationship with your parents can (can probably will) be impacted by this.
      • One parent still works part time, which means cutting back on career development and impacting this parent's earning potential.

Cost Estimation

Use our nanny cost calculator to estimate how much you will have to pay for a nanny. The first step is to get an idea of how much nannies in your area charge for a certain skill set. Keep in mind: what you will find on the following Web sites is just a rough estimate. You will get a clearer picture when you meet with nannies and really start talking about the price for their service. Always negotiate a little bit -- without coming over as cheap and hard to work for. Here are some good places to get an idea of how much nannies in your area charge:

  • glassdoor.com. This is probably the best-known site for finding out what certain professions get paid. Search for the term 'nanny', and don't forget to narrow your search towards the area you are living in.
  • craigslist.org. Narrow to your area (typically automatically selected when you visit the site) and start a search in the 'jobs' category.
  • care.com. Start a search over at this site. You can search for profiles for free, and the profiles have information about experience and how much a nanny charges.

Before using our cost estimator, the other decision you need to make is about for long in a week you need a nanny. This depends very much on your need and the money you can spend. As first time parents and without family close by, we actually underestimated the amount of hours we needed help. Talk to your friends and family about their experience. The number of hours you need covered in a day is essential in your nanny search.

Know what you want

Before starting the search, sit down together with your partner and get clear about what you are looking for. In our case, we wrote an email outlining all the points that were important to us. In our case, this included:

  • We wanted a nanny who comes to our home.
  • We wanted a nanny who focuses on our child. A nanny who brings her/his own child with her was not an option for us.
  • We wanted an experienced nanny who had cared for other children before.
  • We wanted a nanny who can work 30-35 hours per week until our child would be 1.5 years old.
  • References were really important to us. We wanted to be able to speak to a nanny's references.
  • It was important to us that the nanny is vaccinated. We wanted to see proof of that before his/her start.
  • We wanted someone with a certification for Infant CPR.
  • We set our absolute maximum budget. And then went with this budget minus 20% into the negotiations.
  • We needed someone who is a little bit flexible with the numbers of hours per week. We knew that some of our work is highly seasonal, and thus needed more help during these times.
  • We preferred a nanny who can drive.
  • We preferred a nanny who would be fine with doing other light household work. Like folding clothes.

Start your search

Regardless of how you will hire a nanny eventually, we recommend being as broad as possible when you start searching:

  • Nanny agencies. Search for nanny agencies in your area and contact them. In our case, we went through phone consultations with different nanny agencies, but quickly saw that they were not an option for our budget, unfortunately. It can be completely different for you, so we recommend at least reaching out and having a conversation.
  • Email lists. Are you working for a bigger employer? Many of these have internal lists for everything related to parenthood. Get on these lists and look for or directly ask for recommendations. It is not uncommon at all that there is a family that is really happy with their nanny but needs to transition to daycare. Another related approach is to head over to Yahoo Groups and look for groups related to nannys or childcare in your area.
  • Friends and family. This is of course the best source to get really reliable recommendations. Reach out to your network!
  • Depending on your employer, your employer might offer services to help you find childcare. In the end, it is in the interest of your employer that you stay productive and can work. Reach out to the HR/Benefits department at your employer and ask around.

Approach candidates

Next up in the process is to reach out to candidates or let them approach you. In this process, the wish list you created earlier comes in handy. So, reach out through every channel you can find and post what you are looking for. This can be through email lists at work, through craigslist.com, Yahoo Groups, care.com, or any other way you find.

We eventually found our nanny through care.com. The site allows you to post a description of what you are looking for and lets nannies contact you. You can also reach out to nannies directly.

The Interview Process

We are doing a lot of interviewing and hiring in our day-to-day jobs, and one rule we tried to follow is to have a couple of actual interviews with different candidates before making a decision.

Also, even though not an actual part of the interview, consider all communication you have with the nanny before you meet:

  • What impression do you get from emails/phone conversations?
  • Does the nanny respond to your email questions?
  • Are the answers clear and you think you will be able to communicate with the nanny and make your voice heard?
  • Is it easy to setup the actual interview? Are there a lot of cancellations before you meet?

While preparing for the actual interview, we created a list of questions to ask:

  • Please tell us about a situation were you and the family you worked for had a different opinion about something. Can you please tell us how you resolved the issue?
  • Do you have any strong feelings about how a child should be raised? For example, what do you think of attachment parenting?
  • What do you think about the importance for a child to follow rules? How do you make sure that a child follows the rules you set?
  • Can we please see your infant CPR certification? Has there ever been a situation where you had to apply any of what you learned in the CPR course?
  • Can we please see a confirmation that your vaccinations are current? (This was important for us, especially because our baby was so young, she did not have immunity from the vaccines she had already gotten.)
  • Please tell us something about your favourite family you worked for. What made it your favourite family?
  • When would the nanny work? Is there any flexibility in the hours? When would be the earliest start time, or latest end time in a day?
  • Discuss payment. The hourly rate you agree on.
  • Do you expect us to pay for gas? How should that be handled?
  • How do you handle vacations? Are there vacations that you have already set up? Payment during vacations.
  • What kind of contract do you want to sign? Discuss time period of the commitment. The nanny might want a longer commitment than you.
  • Is there anything that is especially important to you?
  • Do you have any questions?

Before each interview, we would clean up our house to make the best impression possible. We would get some cookies to offer, and a glass of water or juice. It is hard to go and work in other people's houses, so we wanted to give the best impression we could.

After each interview, we would discuss about the candidate. It is also good to make some notes, so that you won't mix up different candidates. Writing down feedback very soon after an interview is a standard practice in business. And it will serve you well while interviewing nannies as well.

After doing one or two interviews, we realized that our impression of candidates could be completely different. While one of us thought a person was great, the other had serious concerns. However, we worked on the differences and in the end made a decision. How you reach a decision has a lot to do with your relationship, who spends more time with a nanny, etc.

Reference Checking

Reference checking is very important. It is on you to decide how far you want to go:

  • Read written references if the nanny gave you any. The problem with written-only references is that you cannot ask questions, and that is a big issue in our opinion.
  • Insist on references you can call. Talk to them. Nobody wants to say bad things about a person. But be sure to note how excited someone is when you talk about a candidate.
  • Do an Internet search. If something bad comes up, this can be really bad red flag.
  • There are also online and other services specializing in background checks. One such service is enannysource.com.

If something comes up during reference checking, it is on you to decide whether you want to follow up with the candidate about what you found. It is the most honest thing to do, but of course also depends on what you found out!

Nanny Contract

It is typically a good idea to setup a small contract that both parties sign. From the perspective of you, who hires the nanny, we are actually unsure how enforceable a contract really is. After all, if the nanny tells you after three months he/she wants to do something different, what options do you really have? However, setting up and formalizing an agreement is typically a good idea.

Items that you should include in the contract:

  • Start date and the duration of the employment. Until when are you guaranteeing employment for the nanny. Don't pick a time period that is too long. One year might be the maximum you want to commit to. Then do another contract.
  • A trial period. For example, agree on an 8 week trial period, and only then the commitment.
  • The hourly rate and any other monies you want to pay. For example, you might agree to give money for gas if the nanny wants to use her own car to transport your child. If you do that, check whether you need to pay taxes on that money.

Search the Internet for example nanny contracts, of which there are many. Also, in one case we had a nanny who showed us her previous contract, and wanted to go with something similar. In these cases, be a little careful and make sure that the contract is also good for you.