What Is a Nanny Share? Here’s How it Works

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Ever wonder how real the childcare dilemma is across the United States?

Just ask one of the nearly 98% of families with at least one working parent, or the 67% of families with two working parents.¹

With more than 3.5 million babies born annually in the United States, many working families continue to search for the right childcare option.

A growing number have embraced a collaborative approach to nurturing their young children called a nanny share.

But what is a nanny share, and how do nanny shares work?
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In this guide, we'll break down the concept, benefits, challenges, and considerations related to a nanny share.

What is a Nanny Share?

In general, a nanny share connects two or more families with a nanny who cares for their children in a single location.
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This collaboration can help save money, support quality childcare, and sustain a desired lifestyle.

• Cost Splitting. Families coordinate to secure an experienced caregiver whom they otherwise may be unable to afford. Shared resources can also extend how nannies engage children in educational activities beyond the single-family budget.

• Social Interaction. A nanny share can foster deeper relationships between the children, nanny, and parents, potentially forging lasting connections.

• Lifestyle. Nanny share families often seek a more personalized form of childcare. A nanny share can also provide a more stable and consistent caregiving environment.

That leads some to question, is a nanny share better than daycare? It depends.
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Some families prefer the stability of a single caregiver. Staff turnover in some daycare centers challenges the consistency crucial for a child’s development. Other families welcome regular staffing changes.

How Does a Nanny Share Work?

We’ve answered the question, what is nanny sharing. Now let’s dig into the question, how does nanny share work.

In a nanny share, the nanny typically cares for children from two or more families in a single location. This arrangement requires clear communication and thoughtful planning.
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Parents may rotate nanny share hosting duties. This can help distribute hosting costs like food, cleaning, laundry, utilities, and household wear and tear.

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Some families may choose to have days or events where the nanny watches the kids separately. They might also split time between different homes.

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When it comes to payment, families should plan to pay the nanny separately. The nanny may provide a discount rate to each family. They may also establish a budget for in-house games and activities as well as field trips.  

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The success of a nanny share depends in large part on the compatibility of the participating families. Establishing clear guidelines and expectations from the beginning helps to prevent misunderstandings.

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Families should discuss and agree upon parenting philosophies, dietary restrictions, nap schedules, and emergency procedures to help ensure a harmonious arrangement.

What Are the Pros and Cons of Nanny Sharing?

Nanny sharing offers more than just financial benefits.

Nanny Share Pros

• Location. A familiar, home-based setting allows for more individualized attention. Children in a nanny share can enjoy a caring environment made just for their needs and growth.

• Focus. The smaller group setting can enhance social skills and foster a sense of community. A nanny share offers a good mix of social interaction and personal care. This is different from larger daycare settings, where children may not get as much attention.

• Flexibility. Families can work with the nanny to meet childcare needs and align with their work schedules, providing more convenience and less stress compared to a formal childcare facility. This flexibility also applies to vacation and sick days.

Some families compare a nanny share to a licensed daycare or family childcare. Family childcare providers care for children in their private residence.

Families should consider the pros and cons of a nanny share as they explore the childcare option that best meets their needs and budget.

Nanny Share Cons

• Variety. Daycare centers and family childcare homes let children meet and play with more peers than a nanny share. This exposure can help children develop social skills and adaptability, preparing them for school environments.

• Structure. Daycare and family childcare homes usually have a set plan. This plan helps children learn new ideas and skills that are right for their age.

• Safety. Many states require daycare centers and family childcare homes to obtain licenses. That means they must follow health and safety requirements. Plus, they’re subject to scheduled and random inspections.  

• This regulatory framework gives parents peace of mind. They can trust that the facility meets safety and educational standards.

Nanny Share Benefits 

Consider the following benefits of a nanny share as you wonder, are nanny shares a good idea?

• Cost-Effective. Sharing a nanny generally means a discount on the cost of the nanny, making it cheaper than hiring a private nanny. This cost-sharing model can significantly reduce financial strain on families.

• Flexible Scheduling. Families can negotiate a schedule that works best for them. This flexibility is not usually available at daycare centers. It allows parents to pick hours that suit their work and personal lives.

• Teamwork. Families can work together to make a backup plan for emergencies or last-minute changes. This helps keep childcare steady.

Nanny Share Challenges

While nanny sharing offers many benefits, there are potential challenges, including:

• The Nanny Tax. Your nanny may be considered to be a household employee for each family if they control what work he or she will do or set requirements on how that work will be done. With that control comes payroll and other tax obligations. Each family would be a separate employer. Both families must understand the legal obligations as the employers of the nanny, including but not limited to compensating the nanny and paying applicable taxes to avoid costly fines and penalties.
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• Schedule Conflicts. Coordinating schedules between families can be difficult. Differences in work hours or unexpected changes can create tension and require flexibility and compromise from all parties involved. ‍
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• Parenting Styles. Differences in discipline, diet, routines, or core values can cause friction. Discuss your approaches to discipline, education, and nutrition to ensure understanding and even alignment. Good communication and a readiness to change can help manage these differences. This can help create a positive environment for the children.

• Proximity. Choose a family who lives nearby to make drop-offs and pick-ups convenient. Also consider how hosting logistics and travel time may impact the nanny's schedule and your family's routine.

• Household Wear and Tear. Hosting the nanny in one home can lead to more wear and tear on that household's resources. Families should discuss how to address any additional costs or maintenance needs.

• Communication. Place a priority on transparency and communication. Open, honest, and ongoing dialogue can help prevent misunderstandings and ensure the arrangement continues to meet everyone's needs. Consider scheduling regular social gatherings or activities to help strengthen family bonds.

• Seek and Offer Feedback. Take time to build—and sustain—a strong relationship through productive feedback. Talk with the nanny and the other family and address any concerns promptly.

• Conflict Resolution. Prepare for disagreements before they happen. Establish regular check-ins with the other family and nanny to discuss any concerns or adjustments. Be willing to compromise for the good of the collaboration.

• Resource Pool. Consider establishing a way to cover communal expenses whenever the nanny is caring for the children of both families at the same time, such as snacks, toys, or household supplies. This can help distribute costs fairly and prevent potential disputes over financial contributions.

How Much Does a Nanny Share Cost?

Financial arrangement transparency serves to maintain trust across the nanny share.
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According to the U.S. Bureau of Labor Statistics, the median average wage for childcare workers is $14.60. That pay could vary based on geography, certifications, licenses, experience, and more. Some nannies may also add an additional fee for each child.
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Many families follow the two-thirds rule when it comes to paying for a nanny share. This helps ensure each family pays less than they would if they used the nanny alone. This also helps ensure the nanny receives fair compensation for caring for additional children.
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Once a pay rate is agreed upon, each family should set up to be a separate employer for the nanny and pay the nanny separately, making sure to comply with applicable minimum wage and overtime laws.  
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Nanny shares tend to be more expensive than a daycare center.
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When considering how much does a nanny share make, many families find the convenience, flexibility, and custom care worth the price.

Setting Up a Successful Nanny Share

Consider the following suggestions as you explore whether a nanny share is suitable for your family.

• Budget. Calculate the cost savings compared to using your full-time nanny or paying for daycare. Assess your financial situation and determine how a nanny share fits into your budget. Consider any additional costs that may arise, such as hosting expenses and shared supplies.

• Payroll and Taxes. In a nanny share, each family is an employer of the nanny and pays wages and taxes separately to the Nanny. Each family should understand their tax obligations and how to report these payments accurately to avoid potential legal issues.  

Think about using a payroll service like SurePayroll® By Paychex. It can help you simplify payroll and manage payroll taxes from each paycheck. Required taxes may include Social Security and Medicare (FICA). You may also need to withhold and pay federal and state income taxes as well as local taxes, depending on where you live.
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• Insurance. Ensure that liability insurance covers the nanny while working in both homes. Review your homeowner's insurance policy to confirm coverage for potential accidents or injuries that may occur. Adequate insurance protection safeguards both families and the nanny in the event of unforeseen incidents.

• Workers’ Compensation Coverage. Many states require workers’ compensation coverage for household employees depending on the number of hours worked, pay rate, and other compensation factors.

• Tax Credits. Families should also discuss how to handle potential tax credits or deductions related to childcare expenses. Understanding the financial implications of hiring a nanny can help families maximize their savings and avoid unexpected tax liabilities.

• Record Keeping. It's essential to maintain accurate records of all payments and agreements related to the nanny share arrangement.

• Schedule Flexibility. Decide if you require a more flexible schedule than daycare offers. Consider your work commitments and how a nanny share could accommodate last-minute changes or unexpected events. The ability to negotiate schedules can be a significant advantage for families with non-traditional work hours.

• Social Needs. Consider the level of social interaction you want for your child. Decide if a small group or a larger daycare is better for your child's personality and growth. Some children thrive in intimate settings, while others benefit from the diverse interactions offered by a larger peer group.

Is a Nanny Share Right for Your Family?

Before entering a nanny share, consider the long-term compatibility of the families involved.

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Take time to see if both families have similar long-term childcare goals. Think about how they see the arrangement changing over time. This foresight can help ensure that the nanny share continues to be a viable and beneficial option as the children grow and needs change.

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Consider this checklist to help ensure a smooth, mutually beneficial, and long-lasting nanny share experience:

• What Matters. Take time to identify what matters to you and the well-being of your child. Use this list to build your interview questions.

• Team Interview. Conduct joint interviews to select the right nanny. Use the interview process to check if the nanny is a good fit. Make sure everyone feels comfortable and confident in the choice.

• Nanny Share Agreement. Cover all aspects of the nanny's employment for each family. Ensure that the agreement addresses work hours, duties, compensation, and any other relevant details. Comprehensive agreements can provide clarity and serve as a reference for all parties involved.

• Regularly Review the Arrangement. Schedule periodic reviews to assess how the nanny share is working. Open communication and regular check-ins can help find areas to improve. This ensures the arrangement meets everyone's needs.

• Seek Guidance. Families considering a nanny share should consider consulting with an attorney specializing in employment and tax law. Additionally, online resources and community groups can offer practical advice and shared experiences from other families who have successfully implemented a nanny share.

Conclusion

Throughout this guide we’ve considered the questions, how does nanny share work, and what does nanny share mean to my family.

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As you consider the nanny share meaning, remember the following about a nanny share:

• It can be a great solution for families seeking personalized care at a reduced cost.

• It requires careful planning and communication.

• Be sure to consider payroll, tax, and legal aspects.

• Invest time selecting the other family and nurturing the ongoing relationship.

Whether nanny sharing is better than your own nanny or using daycare depends on your family's specific needs and circumstances. Evaluate your priorities, and you may find that a nanny share is the perfect fit for your childcare needs. The goal is to provide a nurturing and supportive environment that promotes your child's well-being and development.
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With the right approach and commitment, nanny sharing can be a rewarding and fulfilling childcare solution.

SurePayroll Can Help.

Trusted by small businesses and households for more than 25 years, you can count on SurePayroll to provide you with simple, no-nonsense payroll—with no long-term commitment. The easy-to-use SurePayroll solution can help you accurately pay your employees and file your taxes on time, every time.

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Learn more today.


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