Ask the Expert: How to Create a Compensation Package
The Parents’ Club of Palo Alto & Menlo Park (PAMP) has launched an “Ask the Expert” column featuring Stanford Park Nannies’ owner, Daryl Camarillo! She will be answering questions from members on a weekly basis. Below is the first question in the series…
Melissa F. asked: Current going rates for various types of nannies. For example, a 20-hr / week with 2 kids and cooking responsibilities nanny, a 50-hr/week with 1 kid plus driving and laundry responsibilities, etc. kind of like a case study of a specific situation and associated rate ranges. I know there was a survey done a while ago but this would be more of a deep dive into a few specific setups. I’d be interested in total compensation package – incl salary, benefits, pto, sick days, car, gas allowance, food, phone.
Dear Melissa,
Thank you for your question on current nanny rates and compensation packages. As a starting point in our conversation I will mention that, while there are several organizations that conduct salary surveys (with the best, in my opinion, being through the International Nanny Association), I have found that national surveys miss the mark when it comes to our local market. We have some of the highest housing costs in the country and this fact, along with other local economic factors, has a significant bearing on compensation ranges of nannies.
Before discussing rates, it is important to understand why they might vary based on the source of information. At Stanford Park Nannies, we provide the guidance and expertise to ensure that our clients abide by all payroll and tax laws. That being said, we are currently seeing a compensation range of $25 to $30 per hour gross for most of our placements. (It is important to note that California requires nannies to be paid hourly instead of on a salary). This might be higher than figures that you have heard through non-agency sources because of the gross-to-net conversion in addition to the high standards we have set for our vetted nannies.
Other legal factors to consider in addition to payroll taxes are overtime, sick pay, and mileage reimbursement. By law, overtime must be paid for any hours worked over 9 hours in a day or over 40 hours in a week at the rate of 1.5x the base pay. Also required is to provide no less than 3 sick days per year. Mileage reimbursement is set by the IRS and is 54.5 cents/mile for 2018.
When deciding upon the rate you will offer, it is important to look at several factors, including: family budget, experience level you require, number of children, job duties, and the current market. In addition to meeting all employment laws, it is beneficial to ask yourself how attractive your job and compensation package are. For example, while the law requires three sick days, if you are in a position to offer additional time it might attract more applicants. Health care reimbursement is a highly attractive benefit. By law you can offer up to $412 per month. Benefits are an area where you can also get creative. We once had a client who owned an ice cream shop, and they included free access to their ice cream as a benefit! I don’t know about you, but that is definitely attractive to me!
