From high costs to worrying about safety at daycare facilities, it can sometimes be challenging to find adequate childcare. One idea families have explored is a nanny share.
What is a Nanny Share?
In a nanny-share setup, two or more families might hire a nanny and share the cost of their salary.
While the nanny may watch the children from all families involved together, the families could work out a schedule where the children are watched separately depending on the needs of each family.
For example, for individuals who may be able to work from home, a nanny may split the days they visit each household. A nanny share can be an attractive option for many families because they can have the convenience of somebody staying home with their children while sharing costs and saving money.
Advantages of a Nanny Share
Often families may choose to hire a nanny so they can have their children cared for in their home.
This eliminates the inconveniences of getting to daycare and worrying about germs and illnesses.
It also includes the option to conduct background checks on the nanny to help make sure children are in safe hands.
In general, hiring a nanny can mean more individual attention for each child compared to larger group settings.
A nanny share can also help families save money.
Depending on where you live, hiring a nanny can be expensive. Plus, the more you want your nanny to do, the more you can expect to pay them. Splitting the wages with another family can decrease costs. You still need to keep the nanny tax and payroll in mind.
Considerations of a Nanny Share
As you explore a nanny share with another family, it’s important to consider the potential pitfalls.
The first consideration is communication. When partnering with another family and a nanny, communication is key.
It’s a good idea to make a plan for how you’ll communicate with the other family for day-to-day activities and emergencies, like if a child were to fall ill. In terms of a sick child, you’ll want guidelines in place, such as it’s ok for children to be together if one has a small cold, but not if they have a fever. You’ll need a similar plan in place to communicate with your nanny for the same reasons.
Another agreement you’ll likely want to work out with the other family is how to coordinate vacations or time off. This will come down to personal preference, but you may want to plan vacations at the same time and give your nanny a break, or if you do split vacations, have a clear plan for how the nanny will be paid for that time period.
How to Get Started With a Nanny Share
If you’ve evaluated the pros and cons and have decided a nanny share makes the most sense for your family, there are a few things you’ll need to get started.
- Apply for an EIN. If you plan on paying your nanny more than $2,800 in 2025, you are officially a household employer. Being a household employer means that you can’t pay your nanny cash under the table, and you’ll be responsible for withholding Social Security and Medicare taxes and any other applicable federal and state payroll taxes. Head over to the IRS website to apply for an EIN. When doing a nanny share, all families involved will need to follow this step.
- Complete a thorough interview process. Hiring a nanny is a big decision, as this person will be spending a lot of time in your home with your children. Take steps to make sure that you are hiring a reputable person who can provide references and has experience watching children. You may want to consider performing a background check for additional peace of mind.
- Write a contract. Even if you were hiring a nanny on your own, you’d want to have a contract in place outlining house rules, emergency procedures, and time-off policies. When partnering with multiple families, a contract is a great way to keep all parties on the same page and ensure things don’t get unnecessarily complicated.
Simplify Payroll and Tax Management
Work with a payroll service provider who specializes in household and nanny payroll.
SurePayroll® By Paychex simplifies household payroll for you and your employees. Run payroll from anywhere with any device, take advantage of automatic tax calculations, filing and deposits, receive a signature-ready Schedule H to file with your taxes and more.
Learn how SurePayroll can help you take care of the people who take care of your family.
* This content is for educational purposes only, is not intended to provide specific legal advice, and should not be used as a substitute for the legal advice of a qualified attorney or other professional. The information may not reflect the most current legal developments, may be changed without notice and is not guaranteed to be complete, correct, or up to date.
