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How Nanny Shares Work
Child care can be a big source of stress among parents. From high costs to worrying about safety at daycare facilities, it can sometimes be challenging to find adequate child care.
Because so many families find themselves in this situation, one solution that has grown in popularity is a “nanny share.” We explain more about this childcare solution and what you need to know if you want to implement a nanny share below.
What is a Nanny Share?
A nanny share is pretty simple: two or more families will hire a nanny and divide up 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 their children are watched separately depending on the needs of each family. For example, with individuals who may be able to work from home flexibly, a nanny may split up the days they visit each household. A nanny share is an attractive option for many families because they can have the convenience of somebody staying home with their children while being able to share the costs and save money.
Advantages of a Nanny Share
Often families will choose to hire a nanny so they can have the peace of mind of having their children cared for in their home. There is no hassle of getting to daycare, worrying about the germs and illnesses that spread through daycare facilities, and there is the option to thoroughly vet and perform background checks on the nanny to ensure children are in safe hands. In general, hiring a nanny means more individual attention gets paid to each child when compared to larger group settings. However, making sure children don’t grow up isolated is important, as is childhood socialization, which is why a nanny share is a great compromise to have the advantages of a nanny but still allowing children to socialize with each other. As we previously mentioned, nanny shares can be a money-saving option, which is always a big win. Depending on where you live, hiring a nanny can be expensive. Additionally, 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, but be sure to keep the nanny tax in mind.
Considerations of a Nanny Share
Before launching into a nanny share with another family, it’s important to take a step back and think through the potential pitfalls. The first consideration is communication. Communication is key in every relationship, and when partnering with another family and a nanny, you’ll need communication to be locked down. 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 spiked a fever. You’ll need a similar plan in place to communicate with your nanny for the same reasons.
Another agreement you’ll have to work out with the other family involved is how to coordinate vacations or time off. This comes 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 $2,200 in the calendar year, 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 easily 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. Make sure that you are hiring a reputable person who can provide references and has experience watching children. While it may sound extreme, you may want to consider performing a background check to have that extra peace of mind that your children will be safe.
- 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.
Joining a nanny share can be a great solution to common childcare woes. Since this does make you a household employer, just be sure to stay on top of payroll and tax laws to remain compliant and pay your nanny accurately and on time every pay period. If you want to be more hands-off in terms of nanny payroll, an online payroll provider can be a great option and would be able to help with your nanny share needs.
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This website contains articles posted for informational and educational value. SurePayroll is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, SurePayroll. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. If you require legal or accounting advice or need other professional assistance, you should always consult your licensed attorney, accountant or other tax professional to discuss your particular facts, circumstances and business needs.