Hiring a nanny is a wonderful childcare arrangement, but the sticker price of the hourly wage is almost never the true cost of employing one. When you go through a nanny rather than a daycare center, you become the household employer. That means you owe overtime under the Fair Labor Standards Act, you pay employer-side payroll taxes on top of the wages you hand over, and you may also cover health insurance, workers' compensation, paid holidays, and mileage. This nanny cost calculator stacks all of those lines onto the hourly rate so you can see the real annual and monthly bill before you make an offer.
Slide in the hourly wage, the hours per week, and the number of weeks per year, and every figure updates instantly. Expand the advanced options to add employer taxes and benefits, and compare the cash-wage number against the fully loaded annual cost.
How to Use
- Enter the Nanny Hourly Rate you expect to pay. The 2024 national average sits around $20–$28 per hour, but major metros like San Francisco, New York, and Seattle routinely top $35.
- Set Hours per Week. Most nannies work 45–60 hours across five days; anything over the overtime threshold below is paid at the overtime multiplier.
- Adjust the Overtime Threshold. Federal FLSA law sets this at 40 hours per week, but a handful of states and localities (for example, California's daily-overtime rule) use a lower bar. Leave it at 40 unless you live in one of those places.
- Set the Overtime Multiplier. Federal law requires time-and-a-half (1.5x); some union or contract nannies negotiate double-time (2.0x) for weekends or holidays.
- Choose Weeks per Year. Use 52 for year-round care with paid time off already folded into the salary; use a lower number if the nanny takes unpaid weeks you do not pay for.
- Fill in Employer Taxes as a percentage of cash wages. A safe default is 10%, which covers the 7.65% employer FICA share (Social Security and Medicare) plus federal and state unemployment (FUTA/SUTA).
- Add Annual Benefits if you will cover health insurance, workers' comp, a cell phone stipend, paid holidays, or reimbursed mileage.
The result card breaks the weekly pay into regular hours versus overtime, then annualizes it, layers on employer taxes and benefits, and reports the total annual cost plus the smoothed monthly bill.
The Nanny Payroll Formula
Weekly pay is split into two pieces by the federal overtime rule:
- Regular pay = hourly rate × the first 40 hours.
- Overtime pay = hourly rate × the overtime multiplier × every hour beyond 40.
So on a $22/hour nanny working 50 hours a week, the first 40 hours pay $880 and the next 10 hours pay $33/hour (1.5×$22), adding $330. Weekly gross is $1,210, and over 52 weeks that is $62,920 in cash wages.
On top of those wages, the household employer owes roughly 7.65% for the employer share of FICA, plus FUTA (6% on the first $7,000 of wages, usually credited down to 0.6% after SUTA is paid) and state unemployment, which varies by state but averages around 2–4%. Combined, a 10% loading is a reasonable planning estimate, which brings the example to $6,292 in employer taxes and a total annual cash cost of $69,212 before benefits — about $5,768 per month.
That gap between the $62,920 wage and the $69,212 fully loaded number is why nannies always cost more than the hourly rate suggests. Budget for the total, not just the wage.
Regular vs Overtime Hours
Under the FLSA, live-out nannies are non-exempt employees, meaning they must be paid time-and-a-half for every hour over 40 in a workweek. Live-in nannies are also covered in most states, though a few (such as New York and some cities) have specific live-in rules. A common mistake is agreeing on a "salaried" weekly rate and ignoring overtime entirely: if the nanny works 55 hours, the employer still owes the 1.5x premium on the 15 overtime hours, and a wage-and-hour audit can produce back-pay and penalties. Use the Overtime Threshold and Multiplier sliders to model your own schedule.
Examples
Example 1 — The default full-time nanny. A family offers $22/hour for 50 hours a week, 52 weeks a year, with a 1.5x overtime multiplier and a 10% employer-tax loading. Regular pay is $880, overtime is $330, weekly gross is $1,210, annual wages are $62,920, employer taxes add $6,292, and the total annual cost is $69,212, or about $5,768 per month.
Example 2 — Adding benefits. On the same schedule, the family also covers a $3,000/year health insurance stipend and workers' compensation. Benefits line up at $3,000, pushing the total annual cost to $72,212 and the monthly bill to $6,018. This is the number to compare against daycare tuition, which is usually quoted all-in.
Example 3 — A high-wage metro nanny. In San Francisco, a nanny might earn $35/hour for 45 hours a week, 52 weeks, with a 10% employer-tax loading. Regular pay is $1,400, overtime is $262.50, weekly gross is $1,662.50, annual wages are $86,450, taxes add $8,645, and the total annual cost lands near $95,095, or about $7,925 per month. Running this before you interview prevents a job offer that looks affordable on paper but breaks the family budget.
FAQ
How much does a nanny cost per year?
For a full-time nanny working 40–50 hours a week at $20–$25/hour, the annual cash wage is roughly $42,000–$65,000. Once you add the 7.65% employer FICA share, FUTA/SUTA, and any health insurance or workers' comp, the fully loaded annual cost is typically $50,000–$75,000, or about $4,200–$6,200 per month. Use the calculator above by sliding in your own rate and hours.
Do I have to pay overtime to my nanny?
Almost always, yes. Under the federal Fair Labor Standards Act, nannies are non-exempt employees and must receive at least time-and-a-half pay for every hour worked over 40 in a seven-day workweek. A handful of states (including California, Alaska, and Nevada) add daily overtime rules, and a few cities have their own domestic-worker ordinances. Treating the nanny as a salaried independent contractor does not waive this obligation.
What employer taxes do I owe as a household employer?
You owe the employer share of FICA (6.2% Social Security on wages up to the annual wage base, plus 1.45% Medicare on all wages — together 7.65%), federal unemployment tax (FUTA, usually 0.6% on the first $7,000 after the SUTA credit), and state unemployment tax (SUTA, which varies by state and your experience rating). Most household employers plan on a 10% loading on cash wages to cover these. You also withhold the employee's 7.65% FICA share and income taxes from their paycheck.
Is a nanny cheaper than daycare?
In many markets, no. The 2024 average cost of center-based daycare for an infant in the US is roughly $12,000–$18,000 per year, while a full-time nanny runs $50,000–$75,000 fully loaded. A nanny only pencils out as a cost-saver when you have two or more young children (daycare charges per child) or need care outside standard center hours. Use this calculator alongside a daycare quote to compare apples to apples.
Do I need workers' compensation insurance for a nanny?
In most states, yes. Once you hire a regular employee (including a nanny), you are required by state law to carry workers' compensation insurance, which covers medical costs and partial wages if the nanny is injured on the job. A few states make it optional below a wage threshold, but skipping it exposes you to lawsuits. Premiums are usually a few hundred to about $1,500 per year and belong in the Annual Benefits field.
Should I pay my nanny as a W-2 employee or 1099 contractor?
Almost always W-2. A nanny who works in your home, on your schedule, using your equipment, is your employee under IRS and DOL rules. Issuing a 1099 instead of a W-2 misclassifies the worker and exposes you to back payroll taxes, penalties, and interest. A reputable nanny-tax service (such as GTM, SurePayroll, or Poppins) can handle quarterly filings and W-2 prep for a few hundred dollars a year.
Disclaimer
This nanny cost calculator is provided for informational purposes only and does not constitute tax, legal, or HR advice. Estimates use a simplified flat employer-tax loading; actual FICA, FUTA, SUTA, and state domestic-worker obligations vary by state, wages paid, and your unemployment-experience rating. Overtime rules differ under state and local law, and live-in arrangements may carry additional requirements. Always confirm your household-employer obligations with a qualified payroll service or tax professional before extending a job offer.