Safety and Legal Issues

Nanny Guide: Why Nannies Should Be Paid on the Books

Legal Pay Pays Off: Why Nannies Should Be Paid "On the Books" for their Nanny Jobs

The nanny profession pays higher salaries than any other segment of the childcare industry – pre-school, daycare, and even at times teaching.  Each of these is paid “on the books”.  Nanny professionals are in high demand , and nannies’ salaries should have the benefits of being paid legally.

Nanny Jobs: Why is it smart to be paid on the books?

The benefits of being paid legally are numerous, and you really can’t afford to be without them.  As a nanny professional you should expect to be paid legally.  Once you know the benefits, you’ll agree that being paid on the books is best for you.

Your Employment History.

Having taxes paid makes an employment history that is so beneficial to your present and future life.  If your employment is not documented, it is as if you do not work.  A work history is required for future job applications, a student loan, a credit card application, a health insurance application, an auto insurance application, a mortgage, and the list goes on…

A Real Life Nanny Example:

As a nanny, Jill earns $2,000 per month but is paid off the books.  She and her husband applied for a mortgage on their first home.  They did not qualify since she showed no income.

Unemployment Insurance.

When taxes are withheld, you are entitled to receive approximately 50% of your salary for up to six months if you lose your nanny job due to no fault of your own.  This unemployment benefit is free to you since your employer pays the cost.

A Real Life Nanny Example:

Jane, a nanny, lost her $500 per week job since her family had to move out of the area.  Jane received $250 per week until she found another job.

Social Security and Medicare Benefits.

It may seem years away, but consider these tax withholdings as a good investment.

A Real Life Nanny  Example:

A nanny, Barb, earns $30,000 per year.  During her working life she pays about $40,000 to Social Security.  At age 65, she will receive about  $175,000 in Social Security benefits, assuming she lives until age 85.  That’s almost 5 times the amount she contributed during her working years!  What an investment.

Disability Benefits.

In most states, you pay Disability Insurance as a part of what’s deducted from your pay.  If you become ill from a non-work related illness or take maternity leave, you are going to receive benefits when you are unable to work.

A Real Life Nanny Example:

Julia is a full-time nanny and is pregnant.  Julia is going to take some weeks of maternity leave.  Her boss plans to hire another nanny temporarily when she is away.  Julia plans to collect disability to assist her during her maternity leave.

Negotiating Nanny Salaries on the Books

Negotiating a nanny salary “on the books” will have positives result, if you are prepared.  Your prospective new bosses are professionals and are used to negotiating their own salaries and don’t think of it in “net, after-tax dollars." Here’s an example:

Gross nanny Salary:($26,000/yr) $1,001/bi-wkly
Social Security & Medicare ($ 76.51)
Federal Income Tax ($ 82.50)
State Income Tax ($ 25.31)
Total Taxes With held
*approx. 20% of gross salary
NET PAY $816.62

*Depending on your nanny salary, marital status, number of children and the state you live in, your total taxes may be slightly higher or lower than 20% of gross salary, but 20% is a good rough estimate.

Being legal is not only the law; it will also provide you great benefits, which you as a professional nanny deserve.

For more information on nanny taxes,  has all the information you need. Or give them a call for a free consultation on nanny taxes, a free service of   Their toll free number is 888-273-3356.

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