Compensation and the cost of my nanny

In addressing the issue of compensation, you negotiated with your nanny's net hourly wage. But what really interests you is what you will pay at the end of the month! What will be the total cost of the nanny?
As an employer, you should add to the net salary the costs of social charges (see: EI, CPP) you will have to pay. Fortunately, you, child tax benefits and other subsidies may be available to you.

Why does my nanny cost three times more than a home daycare provider?

A childcare assistant requests $7 per hour, and your nanny $16? These are not comparable figures.

First of all, because unlike a home daycare provider, the nanny has to come to you. Secondly, at the home daycare, it's expected she will have other children in her home, which means other income for her. Whereas the childcare assistant's attention will be divided amongst all the children in her care, your nanny will place all her attention on your little one(s).

Especially, with several children, the cost of a nanny stays relatively stable, while the salary of the childcare assistant is multiplied by the number of children in her care.

How much do I have to pay?

Concretely you will have to pay at least the minimum wage per hour in your province. That doesn't mean that minimum wage is the going rate, just that it is the very least that you can legally pay her. 

 In large metropolitan areas such as Toronto, Calgary or Vancouver you should expect to pay more for a nanny (likely between $12 to $20 an hour).

In addition to the base salary of the nanny you are also required to pay monthly employer contributions to CPP and EI which will be explained further on the guide.

DadCAMP's Buzz Bishop states in his blog that the salary for his live-in nanny was approximately $21 000 and actually not a bad deal for full-time childcare for two kids. Certainly the cost of a nanny becomes a lot easier to swallow when you have multiple children to be cared for.

The salary of a nanny.

You will set a salary based on the hours of work. Add on to this wage charges for taxes, EI, CPP. This does not include statutory holiday pay either. So how much will you pay your nanny each month when all is said and done?

Financial subsidies available when you hire a nanny.

Fortunately, parents who employ nannies, at least until the child is 6 years of age are eligible for various forms of aid such as: family allowances, government subsidies, but also the tax credit... This means additional steps to take, but it's worth it in the end.

How to minimize the costs of a nanny?

Despite the support, you are looking to reduce your costs? Here are some tips (legal of course!) to make your payments to the nanny more manageable and budget-conscious. 

And what if I paid my nanny under-the-table?

You are tempted not to declare your nanny in order to avoid paying payroll taxes? This is a serious miscalculation, which makes you take big legal and financial risks! Not worth it in our humble opinion. 

Examples with a breakdown of the numbers.

We have prepared some numerical examples highlighting the real cost of  live-in or live-out nanny. Get out your calculators!