A nanny’s hourly rate of pay will vary from state to state. The rate of pay will also depend on whether you are employing a full-time nanny or an on-call babysitter. Pay is also determined by the amount of experience a nanny has. Typically live-out nannies will earn between $10 and $18 per hour. Live-in nannies’ compensation, on the other hand, will often include room and board so their hourly rate of pay may be less than the live-out nanny’s.
Families hiring a full-time nanny will expect their nanny to be a professional. Because full-time nannies do offer a certain level of professionalism they can expect to receive certain benefits which may include health insurance or a contribution toward health insurance, paid vacation, holiday and sick time.
It is commonly thought that nannies can be classified as independent contractors in order to avoid paying taxes. This is not the case. If you pay your nanny more than $1600 (2008) per year you are obligated to pay half of Social Security and Medicare. To prevent your nanny from paying a lot out of pocket in taxes at the end of the year it is recommended that employers also pay both Federal and State Income Tax.