Financial Tips for Nannies and Other Self-Employed Workers

Nannying is a rewarding and fulfilling career for many kid-loving people with nurturing personalities, but the job can be more complicated than that of an aid at a school or day-care facility. Most nannies are independent contractors; they pay their own taxes, purchase their own health care benefits, and manage their working lives as business owners, unlike regular employees. If you feel called to become a nanny, here are a few factors you should consider and prepare for.

If you have ever worked at a regular job, you know that income and Social Security taxes are taken out of your check before you even see it. When you work as an independent contractor, you are responsible for paying your own income taxes and the full amount of your Social Security tax, including the portaion an employer would pay. The IRS will likely require you to make quarterly payments on your tax obligations. The good news is that if you overpay, you are refunded the overage, and you won’t be stuck with a huge tax bill once per year. The IRS website will give you a good head start on figuring out how much you need to save from each paycheck to cover your taxes. Hiring an accountant is a good idea too.
Health Insurance and Other Benefits
Unlike employees, independent contractors are responsible for the full cost of their health insurance and any vacation time or sick days. You should look for health coverage that is as generous as you can comfortably afford. Skimping on your health insurance can be devastating in the case of a major accident or illness. If your employer offers you vacation time, you will need to cover the cost of your missed pay on your own. This also applies if you have to take a sick day or time off for an emergency. It is a good idea to save a small amount of each check to cover those days when you are not paid. That way you can comfortably manage time off without worrying about money.

Managing Fees and Expenses
Many nannies try to undercut the competition and gain advantage by charging very low rates, but a good employer knows that a good nanny is worth the price. You are caring for their precious children after all. Charge enough so you can cover expenses, such as health insurance, taxes and time off, without negatively impacting your other financial obligations. If a family balks at giving you a living wage, you should look elsewhere. Nannies are in high demand, and families will pay to have the best caregivers. Your fees will also need to encompass any business services and supplies you will provide.
The key to enjoying nanny jobs and other self-employment work opportunities is maintaining a working relationship with your employer is to treat yourself like a commodity and a business. You need to keep in mind the expenses that come along with working as an independent contractor. Adjust your fees accordingly so that you are earning what you are worth and not losing your whole paycheck to taxes and other obligations.

Being a nanny requires you to be more of a money manager than a traditional employee of a company. Staying on top of your business means being smart about all financial aspects of it. To keep up to date with tips and ideas related to being a nanny, go to for more information.

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