Nanny: A Budget-Friendly Option for Large Families


Thinking of hiring a nanny to care for your kids?

Unlike in home daycare and child care centers, nannies are not overseen by the state. They are home employees. That means this option comes with a time consuming learning curve if you are not accustomed to running your own business. But if you are willing to do the leg work, it might just be the right fit for your family.

Hiring a Nanny

Hiring a nanny can be a challenge.

But companies like or are making it easier and safer. They post advertisements, do background checks, help setting up interviews and provide lots of information on the necessary steps needed to hire a nanny.

Using a program like theirs makes the process easier and safer than it might be using options like Facebook Word of Mouth groups or Craigslist, but that convenience comes at the cost of a monthly fee.

Complying with Tax Law

The other difficult side to hiring a nanny is that to be in compliance with tax law, you basically have to run your own company.

But never fear, there are lots of great companies out there to help you through the process. They’ll help you with W-2s, payroll and direct deposits for your employee, quarterly reports and expense sheets. It can seem a bit daunting at first, but many of these companies are available to answer questions, as can your tax accountant.

The Cost of Doing Business

Depending on the number of children you have in daycare, cost can be the driving force to make the switch to a nanny if a child care center is too expensive and space is limited at in home daycares.

Often people wonder what the going rate for nannies are in Colorado Springs. There seems to be a wide range of acceptable salaries.  However, since a nanny is a household employee, he or she must be paid at least minimum wage. Starting Jan. 1, 2018, it was $10.20 per hour and will reach $12 per hour by Jan 1, 2020. The pay range goes up from there. It typically increases $1-$2 per child per hour, depending on experience and job duty. Does the position include house cleaning, transporting or cooking, for instance? 

Also important to know, if you are like my family with a commute on top of your work day (where you often need more than 40 hours a week of coverage), you’ll also have to pay time and a half for any hours over 40. So that minimum wage rate now becomes $15.30 per hour for as many hours over 40 that you need in any given week.

Beyond the Hourly Rate

And as the employer, you actually need to budget for quite a bit more than the hourly rate.

When you hire a nanny as a household employee, you have to pay Social Security and Medicare for that person, you generally do not have to cover health insurance. You do, however, have to pay for unemployment insurance and often payroll services, unless you opt to do it yourself.  Our experience has been if you are working full time yourself, also running payroll and filing quarterly statements is not worth the effort.  We hired it out.  The end result is that you need to tack on approximately 25% more to the hourly rate. 

So a family employing a nanny at the 2018 minimum wage of $10.20 an hour (40 hours), will pay about $510/week ($12.75/hr), out of pocket to employ them.  But again, account for $1-$2 more per hour per additional child, plus $15.30 per hour for any hours over 40 that you need to add on if you have to get 8 hours in yourself.

Then you still have to consider the cost of food, diapers and wipes for your children, as well as any other perks you cover like cell phone, car, car insurance and food for the employee since they can’t leave for lunch.

Advantages of a Nanny

There are many advantages to having someone come to your home to take care of your children.

The big ones?

The convenience of not having to deal with pick up and drop off at multiple locations for your children. And not having to drag all of your children out of bed and get them dressed before you leave for work in the morning. For us, that would substantially cut down on the chaos of our morning routine.

Another upside to having a nanny is you can generally dictate your kids’ daily schedule and activities. Tuesday morning gymnastics class, anyone? But bear in mind, there are extra costs there, too. You’ll need to pay for those pool passes, zoo passes, movie tickets, etc. 

Having your children at home during the day can be a benefit or a disadvantage, depending on your family. Some people may be comfortable staying in while others might prefer to venture out each day. And switching to a nanny might require upgrades to your home. Think backyard entertainment, identifying a playroom and laying ground rules for what areas of the house are acceptable to play in and what the expectation is for cleanliness and chores.

Employment Contract

You might wish to draw up an employment contract that outlines the rules and expectations. Several of the nanny payroll companies and hiring companies can help you find the right resources for this if you don’t already have legal council.

Whether you are well versed about nannies or just considering this route, please drop us a note in the comments. We would love to hear about your experience or questions.

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Rachel is a native Coloradoan, though originally from the Western Slope. She followed her husband Chris to his hometown of Colorado Springs after having met in engineering school at Colorado State University in Fort Collins, CO. Together they have four beautiful children, Tommy (2011), Tazzy (2014), Zach (2015) and Zinny (2018). Having a young and active family keeps Rachel on her toes trying to find ways to keep the ship sailing while still meeting all the demands of motherhood. Though Rachel loves her most important role as Mommy most, she also works full time outside the home as a Water Resources Engineer for the Colorado Division of Water Resources. This role helps keep her life centered, bouncing from detailed and complex discussions relating to Colorado Water Law with her husband ( a mechanical engineer) to daycare and preschool drop off and pick up schedules, while being constantly interrupted by the equally complex musings of her 4 year.