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"Ask the Nanny Expert" Week 4

Posted By Melissa McKenzie, Tuesday, February 6, 2018

Question: Are raises expected after a certain period of time? Is it a year? I'm curious to know what the common practice is. And, how much of a raise is acceptable? Or, could we offer other things in lieu of a raise? education credit? health insurance? Trying to understand what is acceptable.‬


Dear Member,


As a household employer, one of the most common and clear ways to demonstrate how much you value your nanny is through her compensation, so I appreciate your question!


My advice is as follows: A performance and compensation review should be offered every year on the anniversary of your nanny’s start date.


The amount of a raise should take the following into consideration:


  1. Has the job changed in the past year? Have the responsibilities increased?

  2. How motivated are you to keep the nanny employed with your family in the years to come?

  3. How does your nanny’s current compensation compare to fair market?


Your answers to the above questions will help you to determine eligibility for a pay increase; the rest will be determined by your family budget. As a side note, the cost of living increase (~3% in 2017) should be your minimum.


Regarding health insurance:

Beginning in 2017, you can institute a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) and start helping you nanny pay for her health insurance. The maximum amount per year is $4,950


Any household payroll service can help you set this up and manage it for you. The service I recommend is Homework Solutions (www.homeworksolutions.com)

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