How Much Does a Nanny Cost? Complete 2025 Salary Guide

Hiring a nanny provides unparalleled flexibility and personalized care for your children, but it comes at a premium. Unlike daycare, where costs are spread across many families, nanny expenses fall entirely on your household. Understanding the true cost of nanny care—from base salary to taxes and benefits—is essential for families considering this option.

This comprehensive guide breaks down nanny costs across the United States, explains the often-overlooked expenses beyond salary, and helps you determine whether in-home care fits your family's budget.

Average Nanny Costs in 2025

The cost of hiring a nanny varies significantly based on location, experience, responsibilities, and whether you hire full-time or part-time.

National Average Nanny Salaries

| Employment Type | Hourly Rate | Weekly Cost | Annual Cost | |----------------|-------------|-------------|-------------| | Full-time (40+ hrs) | $18 - $28 | $720 - $1,120 | $37,440 - $58,240 | | Part-time (20-30 hrs) | $17 - $26 | $340 - $780 | $17,680 - $40,560 | | Live-in | $15 - $22* | $525 - $770 | $27,300 - $40,040 | | Temporary/On-call | $20 - $35 | Varies | Varies |

*Live-in rates are lower because room and board (valued at $200-$500/week) supplements cash wages.

What Affects Nanny Pay

Location is the single biggest factor. Nannies in San Francisco earn 50-80% more than those in rural areas.

Experience commands higher rates. A first-time nanny might start at $15/hour, while a career nanny with 10+ years experience and credentials can earn $35+/hour.

Number of children typically adds $1-3/hour per additional child.

Additional duties beyond child care (housekeeping, cooking, driving) increase rates.

Qualifications like CPR certification, early childhood education degrees, or specialized training justify premium pay.

"Nanny pay has increased 15% since 2020, driven by pandemic-era demand and recognition of the skill required for quality child care." — International Nanny Association Salary Survey

Nanny Costs by State

Geography dramatically impacts nanny salaries. Here's how costs compare across states:

Highest-Cost States

| State | Average Hourly | Average Annual (FT) | vs. National Average | |-------|---------------|--------------------|--------------------| | Massachusetts | $24.50 | $50,960 | +35% | | California | $24.00 | $49,920 | +32% | | New York | $23.75 | $49,400 | +31% | | Washington | $23.00 | $47,840 | +27% | | Connecticut | $22.75 | $47,320 | +25% | | New Jersey | $22.50 | $46,800 | +24% | | Colorado | $21.50 | $44,720 | +18% | | Maryland | $21.25 | $44,200 | +17% | | Hawaii | $21.00 | $43,680 | +16% | | Virginia | $20.50 | $42,640 | +13% |

Moderate-Cost States

| State | Average Hourly | Average Annual (FT) | vs. National Average | |-------|---------------|--------------------|--------------------| | Oregon | $20.00 | $41,600 | +10% | | Illinois | $19.75 | $41,080 | +9% | | Minnesota | $19.50 | $40,560 | +7% | | Pennsylvania | $19.00 | $39,520 | +5% | | Florida | $18.50 | $38,480 | +2% | | Texas | $18.25 | $37,960 | +1% | | Arizona | $18.00 | $37,440 | 0% | | North Carolina | $17.75 | $36,920 | -2% | | Georgia | $17.50 | $36,400 | -4% | | Ohio | $17.25 | $35,880 | -5% |

Lowest-Cost States

| State | Average Hourly | Average Annual (FT) | vs. National Average | |-------|---------------|--------------------|--------------------| | Tennessee | $16.50 | $34,320 | -9% | | Louisiana | $16.25 | $33,800 | -10% | | Alabama | $16.00 | $33,280 | -12% | | Kentucky | $15.75 | $32,760 | -13% | | Mississippi | $15.50 | $32,240 | -15% | | Arkansas | $15.25 | $31,720 | -16% | | West Virginia | $15.00 | $31,200 | -17% | | South Dakota | $15.00 | $31,200 | -17% |

Metropolitan Area Premiums

Major cities command significantly higher rates than state averages:

| Metro Area | Average Hourly | Annual (FT) | |------------|---------------|-------------| | San Francisco | $28 - $35 | $58,240 - $72,800 | | New York City | $26 - $32 | $54,080 - $66,560 | | Boston | $24 - $30 | $49,920 - $62,400 | | Los Angeles | $23 - $29 | $47,840 - $60,320 | | Seattle | $22 - $28 | $45,760 - $58,240 | | Washington D.C. | $22 - $28 | $45,760 - $58,240 | | Chicago | $20 - $26 | $41,600 - $54,080 | | Denver | $20 - $25 | $41,600 - $52,000 | | Miami | $18 - $24 | $37,440 - $49,920 | | Dallas | $17 - $23 | $35,360 - $47,840 |

The True Cost of a Nanny: Beyond Base Salary

Your nanny's gross salary is just the starting point. Legal employment requires paying additional costs that significantly increase the true expense.

Required Employer Costs

Social Security and Medicare (FICA). As an employer, you pay 7.65% of wages for Social Security (6.2%) and Medicare (1.45%). Your nanny pays a matching 7.65% from their wages.

Federal Unemployment (FUTA). You pay 6% on the first $7,000 of wages, though credits reduce this to 0.6% in most states.

State Unemployment (SUTA). Rates vary by state, typically 1-6% on the first $7,000-$50,000 of wages.

Workers' Compensation. Required in most states. Rates vary by state and are typically 1-3% of wages.

True Cost Calculation

Here's what a $20/hour nanny actually costs:

| Cost Component | Annual Amount | % of Base | |----------------|---------------|-----------| | Base Salary (40 hrs × 52 wks) | $41,600 | 100.0% | | Employer FICA (7.65%) | $3,182 | 7.65% | | FUTA (0.6% on $7,000) | $42 | 0.1% | | State Unemployment (3% on $15,000) | $450 | 1.1% | | Workers' Comp (2%) | $832 | 2.0% | | Total Employer Cost | $46,106 | 110.9% |

Add 10-15% to the base salary to estimate your true employer cost.

Optional But Expected Benefits

Competitive nanny positions often include:

| Benefit | Typical Value | Annual Cost | |---------|--------------|-------------| | Paid Time Off (2 weeks) | 4% of salary | $1,664 | | Paid Holidays (6-10 days) | 2-4% of salary | $832 - $1,664 | | Health Insurance Contribution | Varies | $200 - $500/month | | Guaranteed Hours* | Varies | Part of salary | | Professional Development | Varies | $200 - $500/year | | Year-end Bonus | 1-2 weeks' pay | $800 - $1,600 |

*Guaranteed hours means paying full salary even when you don't need care (vacation, etc.)

Full Annual Cost Estimate

For a $20/hour full-time nanny in a moderate-cost area:

| Item | Annual Cost | |------|-------------| | Gross wages (40 hrs × 52 wks) | $41,600 | | Employer taxes (~11%) | $4,576 | | Paid time off (2 weeks) | $1,600 | | Paid holidays (8 days) | $1,280 | | Health insurance contribution | $3,600 | | Year-end bonus | $1,200 | | Total Annual Cost | $53,856 |

Your $20/hour nanny actually costs about $26/hour when fully loaded.

Nanny Tax Obligations: What You Need to Know

Hiring a nanny makes you a household employer with legal obligations. Ignoring these can result in penalties and back taxes.

The "Nanny Tax" Threshold

If you pay a household employee $2,700 or more in a calendar year (2024 threshold), you must:

Withhold and pay Social Security and Medicare taxes
Pay federal unemployment tax (on wages up to $1,000/quarter)
File Schedule H with your personal tax return
Provide a W-2 to your employee by January 31

State Requirements

Most states require:

State income tax withholding (in states with income tax)
State unemployment insurance registration
Workers' compensation coverage
New hire reporting

Managing Nanny Payroll

DIY approach. Some families manage their own payroll using IRS Publication 926 and their state's household employer resources. This is time-consuming and error-prone.

Payroll services. Companies like HomePay, SurePayroll Nanny, GTM Payroll, and Poppins Payroll specialize in household employment. Costs run $50-$100/month but ensure compliance and save hours of administrative work.

Accountant. Your CPA can often handle household employment, especially if you already use their services.

Consequences of Paying "Under the Table"

Paying cash and not reporting wages may seem simpler, but it creates significant risks:

For you:

IRS penalties for unpaid employment taxes
Potential fraud charges
Loss of Dependent Care FSA tax benefits
Loss of child care tax credit
Liability if your nanny is injured without workers' comp

For your nanny:

No Social Security credits toward retirement
No unemployment benefits if you terminate employment
No verifiable income for loans, rentals, or other purposes
Tax liability if the IRS discovers unreported income

Cost Comparison: Nanny vs. Other Care Options

Is a nanny worth the premium? Here's how costs compare:

One Child Comparison

| Care Type | Annual Cost | Pros | Cons | |-----------|-------------|------|------| | Nanny (full-time) | $45,000 - $60,000 | Personalized, flexible, in-home | Highest cost, single caregiver | | Daycare Center | $12,000 - $24,000 | Structured, reliable, social | Fixed hours, germs, commute | | Home Daycare | $8,000 - $16,000 | Lower cost, home-like | Less regulated, variable quality | | Au Pair | $18,500 - $22,000 | Cultural exchange, live-in | Limited experience, visa constraints |

Two Children Comparison

| Care Type | Annual Cost | Notes | |-----------|-------------|-------| | Nanny | $48,000 - $65,000 | Same nanny, modest increase | | Daycare Center | $22,000 - $44,000 | Full second tuition | | Home Daycare | $14,000 - $28,000 | Full second fee | | Au Pair | $18,500 - $22,000 | Same cost, up to 2 kids |

Three+ Children: When Nannies Make Sense

With multiple children, nanny costs become more competitive:

| Number of Children | Daycare (annual) | Nanny (annual) | Difference | |-------------------|------------------|----------------|------------| | 1 child | $18,000 | $50,000 | +$32,000 (nanny) | | 2 children | $34,000 | $55,000 | +$21,000 (nanny) | | 3 children | $48,000 | $60,000 | +$12,000 (nanny) | | 4 children | $60,000 | $65,000 | +$5,000 (nanny) |

The "Break-Even" Point

For many families, a nanny becomes cost-competitive with three or more children, especially when factoring in:

Eliminated daycare registration fees ($200-600 per child)
No drop-off/pickup logistics
Sick child coverage (daycare requires alternative care)
Flexibility for non-traditional schedules

Nanny Salary Calculator: How to Budget

Use this framework to calculate your expected nanny costs:

Step 1: Determine Base Hourly Rate

Research rates in your area using:

Care.com Salary Calculator
International Nanny Association Salary Survey
Local nanny agency rate sheets
Networking with other families

Adjust for your situation:

Number of children: Add $1-3/hour per additional child
Special needs: Add $2-5/hour for medical or behavioral needs
Household duties: Add $2-4/hour for significant cleaning, cooking
Experience required: Premium rates for veteran nannies

Step 2: Calculate Gross Annual Wages

| Component | Calculation | |-----------|-------------| | Hourly rate | $22 (example) | | Hours per week | × 45 | | Weeks per year | × 52 | | Gross Annual | $51,480 |

Step 3: Add Employer Costs

| Item | Rate | Amount | |------|------|--------| | FICA | 7.65% | $3,938 | | FUTA | 0.6% | $42 | | State Unemployment | 2.5% | $1,287 | | Workers' Comp | 1.8% | $927 | | Total Taxes | | $6,194 |

Step 4: Add Benefits

| Benefit | Amount | |---------|--------| | Paid holidays (10 days) | Included in 52-week pay | | Paid vacation (2 weeks) | Included in 52-week pay | | Health stipend | $300/month = $3,600/year | | Year-end bonus | $1,500 | | Total Benefits | $5,100 |

Step 5: Total Annual Cost

| Component | Amount | |-----------|--------| | Gross wages | $51,480 | | Employer taxes | $6,194 | | Benefits | $5,100 | | Payroll service | $1,200 | | Total Annual Cost | $63,974 |

This works out to approximately $5,331 per month or $27.35 per hour fully loaded.

Ways to Reduce Nanny Costs

Nanny care is expensive, but several strategies can bring costs down.

Nanny Sharing

Share your nanny with another family, splitting costs while each child gets a built-in playmate.

How it works:

Each family pays 50-60% of what a solo nanny would cost
Children are cared for together
Nanny earns more per hour (total)

Typical savings: 25-40%

Example:

Solo nanny: $50,000/year
Nanny share (per family): $30,000/year
Savings: $20,000/year

Part-Time Arrangements

If you or your partner can work from home some days or have flexible schedules, part-time care reduces costs proportionally.

| Schedule | Hours/Week | Annual Cost (at $22/hr) | |----------|-----------|------------------------| | Full-time | 45 | $51,480 | | 4 days | 36 | $41,184 | | 3 days | 27 | $30,888 | | Half days | 25 | $28,600 |

Live-In Nannies

A live-in nanny accepts lower cash wages in exchange for room and board.

| Arrangement | Cash Wages | Room/Board Value | Total Comp | Your Cash Outlay | |-------------|-----------|------------------|------------|------------------| | Live-out | $50,000 | $0 | $50,000 | $50,000 | | Live-in | $35,000 | $12,000 | $47,000 | $35,000 | | Savings | | | | $15,000 |

Considerations:

Need suitable private space (bedroom, bathroom)
Less privacy for your family
Must still comply with overtime rules
Local laws vary on room/board deductions

Au Pairs

Au pairs are young adults (18-26) from other countries who live with host families for cultural exchange.

Fixed costs (through agencies):

Agency fee: $8,500 - $10,500
Au pair stipend: $195.75/week ($10,179/year)
Educational contribution: $500
Total: $19,180 - $21,180/year

Trade-offs:

Limited to 45 hours/week, 10 hours/day
One year commitment (extendable to 2)
Less experience than professional nannies
Must provide room, board, and transportation

Combination Care

Some families reduce costs by combining care types:

Part-time nanny + grandparent help
Nanny for infants, daycare for preschoolers
Nanny share + parents work from home some days

Frequently Asked Questions

Q: How much should I pay a nanny per hour?

A: Average rates range from $15-$28 per hour depending on location, experience, and duties. Research your local market and pay competitively to attract quality candidates.

Q: Do I have to pay overtime to my nanny?

A: In most states, yes. Live-out nannies are generally entitled to overtime (1.5× regular rate) for hours over 40 per week. Live-in nannies have different rules that vary by state.

Q: Can I pay my nanny as an independent contractor?

A: No. The IRS is clear that nannies are household employees, not independent contractors. You control when, where, and how they work, which makes them employees by definition.

Q: What's included in a typical nanny benefits package?

A: Standard benefits include paid vacation (2 weeks), paid holidays (6-10 days), and guaranteed hours. Competitive packages add health insurance contributions, annual raises, and year-end bonuses.

Q: Should I use a nanny agency or hire directly?

A: Agencies cost 15-20% of annual salary but handle recruiting, screening, and background checks. Direct hiring through Care.com or word-of-mouth saves money but requires more effort.

Q: How much more should I pay for a nanny with infant experience?

A: Experienced infant care specialists typically command $2-5 more per hour than general caregivers. Their expertise in newborn care, sleep training, and developmental milestones justifies the premium.

Conclusion

Hiring a nanny represents a significant investment—typically $45,000-$65,000 annually when all costs are included. For many families, this premium buys unmatched flexibility, personalized care, and convenience that other options can't match.

The key is understanding true costs before committing. Factor in taxes, benefits, and additional expenses beyond base salary. Consider cost-reduction strategies like nanny sharing or part-time arrangements. And ensure you comply with legal requirements—the consequences of "under the table" payments far outweigh the short-term savings.

For families with multiple children, non-traditional schedules, or special needs, a nanny often makes financial sense compared to alternatives. For families with one child and standard hours, the calculation is more complex and depends on your priorities and budget.

Whatever you decide, investing in quality child care is investing in your child's development and your family's peace of mind. The right nanny, fairly compensated, becomes an invaluable partner in your parenting journey.

Comparing your options? Read our guides on nanny vs. daycare, how to hire a nanny, and managing your nanny. For more on costs, explore our child care cost overview.