Your nanny cares for your children and keeps your life running smoothly all year long. From helping with homework to minding nap and meal times, come December, it’s important to say thank you for those efforts by giving a Christmas bonus. But lots of families aren’t aware that they should be giving their nannies a little extra this time of year.
Do you pay your nanny a Christmas bonus? At Care.com we are asking our families about their Christmas bonus plans. Answer our survey on Christmas bonuses here!
Here are answers to some of the most frequently asked questions about nanny bonuses.
- Why Should You Give Your Nanny a Christmas Bonus?
You may feel a bonus isn’t necessary because you pay your nanny well and show your appreciation in other ways. However, a Christmas bonus is customary in most jobs, and nannying is no exception. Many people count on it as part of their income, particularly with all of the extra outgoings that Christmas entails.
Also, a holiday bonus can go a long way towards letting a nanny know her employers appreciate the work that she does.
Like any employee, a nanny may feel unimportant or undervalued if she receives no holiday bonus, particularly if other nannies in their network do. And if your nanny feels like she’s being short-changed, she may start looking for a new job in the New Year. - When Would You Not Give Your Nanny a Bonus?
Bonuses are an extra thank you for a job well done. Don’t give your nanny a bonus if you’re about to let her go for poor performance or because things aren’t working out. Doing so will lead her to believe you’re pleased with her work and give her a false sense of job security.
- How Much Should You Give Your Nanny for a Bonus?
If you live in a city, the bonus might be more; if you’re in a rural area, it might be less. Start by doing a little research and ask what other parents are giving their nannies.Kirsty Wild from Nannytax, says “Don’t forget that if you are giving your nanny a Christmas bonus, tell Nannytax or your payroll bureau as bonuses need to be declared (tax and NI will be deducted). In 2013 Nannytax has seen a trend from employers of nannies giving bonuses between £200 – £1000.”
The size of the bonus also depends on your family’s financial status. Most families give one week’s salary, but some working parents can only afford a half-week’s pay, while others may give their nanny two weeks’ or more.
Just make sure it’s consistent. If your longtime nanny has grown accustomed to receiving a certain holiday bonus, it could cause confusion and even resentment if you cut corners this year.
- What if You Can’t Afford a Bonus this Year?
In these days of straitened times, unexpected expenses may leave you with a tight Christmas budget. A way around this is to factor a bonus into your budget when you first hire your nanny. If you find yourself unable to afford the usual holiday bonus, explain this to your nanny. She’ll probably understand – but don’t forget that this may make her concerned for her job, so reassure her that (if this is the case) you are looking to keep her on for the next year. Rather than giving her one lump sum, an alternative could be to break it down into smaller more manageable amounts over a period of time.
- Can I Give a Bonus During Another Time of the Year?
Some families give nannies their bonuses on their work anniversary – 1 day for a year’s service, 2 days for 2 years and so on. Consider instituting an annual or half year review, which gives you time to take stock with the nanny, of their performance. If things are going well, you can add extra pay at this point too. However, make sure that your nanny is aware of the timing.
- Do I Have to Pay Taxes on the Bonus?
You typically don’t think of taxes while you’re handing out presents, but your nanny’s bonus (whether it’s for the holidays or during a performance review), is considered taxable income and you need to pay taxes on it — along with the rest of her income. Because you’re an employer, the bonus doesn’t qualify as a “gift.”
- Is a Gift Acceptable?
If your nanny is used to receiving a cash bonus, switching to a gift could be taken as a sign of dissatisfaction on your part. For a new nanny who has spent little time with your family, a thoughtful gift is appropriate.In addition to a holiday cash bonus from the parents, you may want to give a small gift from the children. Personal items such as scented soaps or small items related to a nanny’s hobby are always great ideas. Nannies (and teachers!) love small items that the children have made for them, or letters telling them what they enjoy doing with them – all of this shows appreciation and thought.
A holiday bonus should be looked at as just that — a bonus for a job well done. But it’s also important and appreciated for a nanny who is a valued member of your family.