$
US average: $15–$30/hr · Major cities: $20–$35+/hr
hrs
Full-time = 40 hrs · Part-time = 20–25 hrs
wks
Typical: 50 weeks (2 weeks paid vacation)
More children may increase rate by $2–$5/hr
wks
Industry standard: 1–2 weeks paid
$
Annual health stipend, transit, etc.
Total Annual Cost to You
—
💡 Tax savings tip: A Dependent Care FSA (DCFSA) lets you pay up to $5,000/year in nanny costs with pre-tax dollars — saving roughly $1,500–$2,000 in taxes at a 30% combined rate. The Child and Dependent Care Tax Credit provides an additional credit of 20–35% of up to $3,000 in expenses per child.
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Understanding Nanny Taxes
When you hire a nanny, you become a household employer and are required to pay payroll taxes if you pay the nanny $2,700 or more in 2024. This is commonly called the "nanny tax."
Employer Tax Breakdown
Employer FICA = Gross Wages × 7.65%
(Social Security 6.2% + Medicare 1.45%)
FUTA = First $7,000 of wages × 6.0%
(reduced to 0.6% after state unemployment credit)
Total Employer Tax ≈ Gross Wages × 9–11%
Example: $40,000 gross annual wages
Employer FICA: $40,000 × 7.65% = $3,060
FUTA (net): $7,000 × 0.6% = $42
Total employer taxes: ~$3,102
Employer FICA: $40,000 × 7.65% = $3,060
FUTA (net): $7,000 × 0.6% = $42
Total employer taxes: ~$3,102
Average Nanny Rates by City (2024)
| City / Region | Average Hourly Rate | Annual (40 hrs/wk) |
|---|---|---|
| New York City | $22–$35/hr | $45,760–$72,800 |
| San Francisco / Bay Area | $22–$32/hr | $45,760–$66,560 |
| Los Angeles | $18–$28/hr | $37,440–$58,240 |
| Seattle / Boston | $18–$28/hr | $37,440–$58,240 |
| Chicago / Denver | $16–$25/hr | $33,280–$52,000 |
| National Average | $15–$22/hr | $31,200–$45,760 |
| Rural / Small City | $12–$18/hr | $24,960–$37,440 |
Sources & Methodology
Tax rates based on 2024 IRS Publication 926 (Household Employer's Tax Guide). Wage data from Care.com 2024 Cost of Care Survey. Updated March 2026.
2024 FICA rates, FUTA rates, thresholds, and filing requirements for household employers
Annual survey of nanny and childcare rates by city and region across the United States
Methodology: Gross annual wages = hourly rate × hours/week × weeks/year + PTO pay. Employer FICA = gross wages × 7.65%. FUTA = min(gross wages, $7,000) × 0.6% (after standard state credit). Total cost = gross wages + employer FICA + FUTA + benefits. All figures use 2024 IRS rates.
Last reviewed: March 2026
Frequently Asked Questions
A nanny costs $15–$30 per hour on average nationally. For 40 hours per week, gross annual pay is $31,200–$62,400. Add 10–11% for employer payroll taxes, bringing total annual cost to $34,500–$69,000. In major cities like NYC and San Francisco, nanny costs are higher — $22–$35/hour, or $46,000–$73,000 annually before taxes.
If you pay a nanny $2,700+ in 2024, you must pay employer FICA taxes (7.65% of gross wages) and FUTA (federal unemployment tax, typically 0.6% of first $7,000). You also withhold the nanny's share of FICA (7.65%) and possibly income tax from their paycheck. Nanny taxes are reported on Schedule H attached to your Form 1040 tax return.
Yes — two main tax breaks apply: (1) Dependent Care FSA: contribute up to $5,000/year pre-tax, saving roughly $1,500–$2,000 in taxes at a 30% rate. (2) Child and Dependent Care Tax Credit: claim 20–35% of up to $3,000 for one child or $6,000 for two+ children. These can offset a significant portion of nanny costs. Consult a tax professional to maximize both.
An au pair costs $195–$230 per week (set by the US State Department program) plus room, board, and education stipend — total approximately $20,000–$25,000/year. This is significantly less than a full-time nanny. Tradeoffs: au pairs are limited to 45 hours/week, are typically 18–26 years old with less experience, live with your family, and are in the US on a J-1 visa program for up to two years.
A competitive nanny package typically includes: hourly wage, paid vacation (1–2 weeks standard, 2–3 weeks in high-cost areas), paid sick days (5–10 days), paid holidays (major federal holidays), and sometimes a health insurance stipend ($50–$200/month), mileage reimbursement for driving with children, and a performance review with raise after 1 year. Benefits help attract and retain quality nannies.
For one child, daycare ($10,000–$20,000/year) is usually cheaper than a full-time nanny ($35,000–$70,000/year). For two or more children, the math changes — you pay one nanny rate regardless of child count, while daycare costs per child. For two children in daycare at $15,000 each, that's $30,000/year — competitive with a part-time nanny. A nanny also offers flexibility, no drop-off time, and personalized care.
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