How to Hire a Nanny and Find the Perfect Caregiver for Your Kids

Posted on: November 14, 2018, by :

How to Hire a Nanny and Find the Perfect Caregiver for Your Kids

Are you thinking of hiring a nanny?

A nanny is a person who cares for your children when you can’t, which explains why this decision is so important. In fact, some would say a nanny or caregiver is the most important person you will ever hire. And since the person you hire will be taking care of your most valuable and prized assets, you need to find someone who will do more than keep them fed and clothed. You need someone who will provide structure and discipline, engage them daily, teach them essential life skills and, most importantly, love them when you can’t be there to do so yourself.

Don’t take this decision lightly. Get it right, and you’ll rest easy knowing someone you trust is caring for your kids. Get it right, and your kids will grow to love this person just as they would a favorite aunt or uncle. Get it wrong, and you might rival Stephen King with the horror stories you could write.

So, how do you go about finding a great nanny? Let’s take a look.

Everyone has an opinion about whether or not both parents should work. What’s best for the children, however, remains unclear. The reality is that for financial reasons, most families need to have two working parents. According to the Department of Labor, 70% of mothers with children under the age of 18 participate in the labor force; out of these, 75% work full-time.

Mothers are increasingly becoming the sole breadwinners for their family. A study conducted by the Pew Research Center found that in 2013, mothers were the sole or primary source of income for 40% of all households with children under the age of 18.

With both parents working, someone else has to step in to care for the children, and this care doesn’t come cheap. According to Childcare Aware of America, costs of childcare are higher than the combined yearly totals of a household’s food and transportation costs, for every state in the nation. According to, childcare is unaffordable for seven out of 10 American families. In fact, one out of three families now spend 20% or more of their annual household income on childcare, while another 19% spend 25% or more.

Of course, there are tax deductions and credits for children, but these don’t make a huge difference when you consider just how much annual childcare costs an average family with two kids. While daycare is likely the least expensive option, some families choose to employ a part-time or full-time nanny.

Nannies cost more than double that of a daycare center or preschool which, according to, costs around $211 per week for an infant child. However, your child benefits because they get one-on-one attention while staying in the comfort and safety of their own home. According to, the average hourly wage for a full-time nanny in 2018 was $14.12 per hour or $565 per week. Nannies with a college degree earned $16.25 per hour or $650 per week.

So before you do anything else, it’s crucial that you look at your budget and determine if you can afford to hire a nanny.

Finding a good nanny can be a lengthy and arduous process. However, if you find the right person, he or she will likely become part of your family. So, it’s important to take your time and find someone who fits with both you and your children.

Before you start looking for a nanny, sit down and think about qualities that are most important to you. Defining your wants and needs prior to interviewing candidates can go a long way in helping you find the best person to care for your children. To get the thinking-process started, ask yourself these questions:

When it comes to employing a nanny, it’s important to realize that in the eyes of the government, you’re now a “small business owner.” This means that you have to file forms with your state and the Federal government and withhold taxes if you pay your nanny more than $2,100 per year.

If you’re considering paying your nanny under the table to avoid all the paperwork, don’t. If you get caught, the fines are hefty, averaging around $25,000 to $100,000, and could include jail time. It’s also unfair to your nanny, as you’re robbing them of Social Security and unemployment benefits, as well as a verifiable work history, which they’ll need to apply for a mortgage or car loan. So, do it by the book or don’t do it at all.

What Do I Have to Withhold?

As an employer, you’re legally required to withhold Social Security and Medicare taxes. You’re not required to withhold Federal and state income taxes unless you and your employee agree to do this. If you do not withhold Federal and state income taxes each week or month, your nanny will be responsible for paying them at the end of the year.

So, what do you need to do to hire a nanny legally?

Nanny Hiring Toddler Outdoor Play Chalk

Step 1: File for an EIN

Your first step is to file for state and federal employer numbers. You can apply for a Federal Employer Identification Number (FEIN or EIN) with the IRS. To register for a state number, you’ll need to contact the office that handles employment in your state.

Step 2: Check Legal Ability to Work

Once you find a nanny you want to hire, you’ll need to complete the IRS Form I-9 to confirm that he or she is legally able to work in the United States. You must give this form to your nanny within three days of hiring.

Step 3: File a New Hire Report and Apply for an Unemployment Number

Once you hire a nanny, you’ll need to file a state New Hire Report, which registers your nanny with the state. You’ll need to do this within the time frame specified by your state. Type “New Hire Report” into Google, along with your state name, to find your local employment office.

You’re also going to need to apply for an Unemployment Identification Number in your state; this number allows you to pay unemployment taxes. To do this, Google “unemployment identification number,” along with your state name, to find the appropriate employment office.

Step 4: Fill Out a W-4

Once hired, your nanny will need to fill out IRS Form W-4, otherwise known as the Employee’s Withholding Allowance Certificate if you both agree that you’ll withhold taxes on their behalf. This form documents how much you’ll be withholding from each paycheck for income taxes.

Step 5: File Your Taxes

You can find out more on the taxes you’ll need to file for your nanny, as well as how to do it, on the 2018 IRS Household Employer’s Tax Guide. This guide also tells you what you’ll need to file your year-end taxes.

Tip: Consider a Payroll Service

If the legal headaches and paperwork are sending you over the edge, you could consider using a payroll service. A payroll service, such as GTM takes care of all the paperwork for you and handles weekly or monthly payroll. They’ll also prepare all your year-end tax forms and help ensure you’re abiding by state and Federal labor laws.

A payroll service will cost you, although the amount varies. According to the National Small Business Administration’s 2017 Small Business Taxation Survey, 36% of small businesses paid $101 to $500 per month for payroll services, while 19% spent $51 to $100 per month. Because you’re only employing one person, your costs will likely be on the low end of this spectrum. For example, GTM charges $65 per month, plus a one-time $95 set-up fee.

A background check is an essential part of finding a trustworthy caregiver, but you can’t legally run a background check on anyone unless you’re an employer or landlord. This is why you should take the steps mentioned to become a legal employer before you begin interviewing applicants.

If, however, you start interviewing applicants before you receive your EIN and other documentation, you can still get background information on candidates by asking them to provide it for you.

Ask your top picks to run a background check on themselves using a reputable service like GoodHire, which is compliant with the Fair Credit Reporting Act, and to provide you with a copy of the report. A starter background check through GoodHire starts at $19.99 and includes nationwide criminal, traffic, and sex offender databases. A basic background check costs $29.99 and includes the terrorist watch list, address history, and a Social Security Number trace. Their most advanced background check costs $59.99 and includes all of the above as well as county criminal court histories.

Of course, once you’re a legal employer, you can run these reports yourself.

Today, there are plenty of degrees, certifications, and classes to help educate and train people to care for children of all ages. Here are some of the training classes and certifications that you might see on a qualified nanny’s resume:

Another way to find a great nanny is to use a nanny referral agency like Nanny Poppinz, which offers nationwide service, SitterCity, or a local agency.

The most significant benefit of using a nanny referral agency is that they do a lot of the legwork for you. Nannies in their referral service have already gone through an extensive background and reference check, which, in the case of Nanny Poppinz, includes:

Most placement agencies also conduct a face-to-face interview with every nanny.

Of course, hiring a nanny through a referral agency is expensive. Every agency has a different fee structure, but you can expect to pay between $1,000 to $2,000 for a referral fee, or a percentage of the nanny’s annual salary, plus a non-refundable registration fee, which is generally around $100.

Nanny Hiring Radio Baby Toys

So, what do you when its time to sit down with applicants and talk to them face-to-face? Here’s a nanny interview cheat sheet:

Your first step should be to conduct a short phone interview with each applicant. A phone interview gives you the opportunity to talk to each applicant directly and discuss what you’re looking for. This is also a chance for you to request at least three references and the applicant’s resume if they haven’t sent those to you already.

The benefit of conducting a phone interview first is that it allows you to collect essential information before investing time in a face-to-face meeting. You can review each applicant’s resume and references, and then decide which applicants warrant an in-person interview.

When reviewing an applicant’s resume, pay careful attention to how much time he or she spent with each family. If they spent a year or less with multiple families, this could be an indication that they’re not wholly committed to caregiving, that they’re difficult to work with, or that they don’t have a natural rapport with children.

Last, call every reference they give you. Many parents skip this step and regret it later. You can learn a lot about a caregiver by talking to parents they’ve worked with in the past. Ask what they loved about this nanny and, most importantly, what they thought his or her most significant weakness was.

You should always meet a potential nanny at least two, and ideally three times before deciding if he or she is “the one.” The reason is that your first interview should be between the two of you. A one-on-one interview gives you the opportunity to look over their resume again and to take your time asking questions. Tell the applicant about your children’s personalities, likes, and dislikes, and fill him or her in on their daily routine.

Your next meeting should include the children so that you can see how they interact together. According to Forbes, it might be helpful to make this meeting a “working interview,” which means you pay the nanny to watch the children for several hours while you observe.

If you opt for a third interview, you could use this time to discuss the details of their employment with you.

So, what should you ask a potential nanny during the initial interview? Consider these questions:

Some interview questions, however, are illegal. The Equal Employment Opportunity Commission (EEOC) prohibits discrimination based on a person’s:

You cannot ask any questions surrounding these issues. For example, you cannot ask an applicant if he or she has children of their own, or plans to have children in the future.

Once you’ve interviewed your applicants and made your decision, create a work contract that details your nanny’s work environment and responsibilities. You can find free work agreements online by searching in Google, “nanny work contract” or “nanny work agreement.” You can also create your own. Your work contract should at least include the following information:

Nanny Children Reading Tent Playroom Book

If the cost of hiring a nanny is too high, you might consider a nanny share. A nanny share occurs when two or more families agree to share a nanny, splitting the costs and time. Nanny sharing is a relatively recent phenomenon and reports that in 2016, families looking for a nanny share grew by 23% compared to the year before.

A nanny share can help you save around one-third on childcare costs. According to, a nanny typically charged each family two-thirds of what they would charge one family alone; this is because they’re caring for more children. For example, a typical full-time nanny for one family charges $565 per week. A nanny caring for two families would charge each family $376 each. This nanny would earn $752 per week. For you, that’s a savings of $188 per week.

There are several different ways to structure a nanny share. You and another family could split a full-time nanny equally between you, which means that the nanny would care for both of your kids five days per week. Or, you could divide the nanny’s time differently and have the nanny care for their kids three days per week and for your kids two days per week.

So, how do you find a family willing to do a nanny share with you?

If your kids are already in preschool or daycare, talk to other parents discreetly about whether or not they’re interested in a nanny share. Reach out to the parents of your children’s friends; if they’re not interested, they might know someone who is. You can also talk to other parents at work, at your local library’s events for kids, or even put an ad on Craigslist.

At first glance, a nanny share might seem like the perfect arrangement. However, there is a lot to consider before you jump into this arrangement. Consider the following:

Once you start thinking about the details of a nanny share you can see how quickly things could get complicated. Yes, talking about some of these details and concerns can be awkward, but it’s essential that you discuss them before you hire someone. You’re entering a business relationship with another family, so you need to be open and honest about everything from money to discipline.

Hiring a nanny to care for your children is one of the most important decisions you can make as a parent. The right nanny will show kindness and love to your children. They’ll be there to kiss the boo-boos, cook the macaroni, and take them to the water park on hot days. Occasionally, they’ll be there for milestones that you will miss, such as your child’s first steps or losing their first tooth. But if your nanny is someone that you and your children love and trust, the heartache won’t be as deep. Remember, it takes a village to raise children, and your nanny will become part of your village. You’re on the same team.

Finding the right nanny can take months, and it’s not a process that you should rush through. Whenever possible, give yourself enough time to vet every person who submits a resume thoroughly.

Do you use a nanny to care for your children? How would you describe your experience?

Updated: August 9, 2018
Categories: Family & Home, Kids

Heather Levin is a writer with over 15 years experience covering personal finance, natural health, parenting, and green living. She lives in the mountains of Western North Carolina with her husband and two young sons, where they’re often wandering on frequent picnics to find feathers and wildflowers.

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How to Hire a Nanny and Find the Perfect Caregiver for Your Kids

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