By Care com HomePay
We were so excited to get the results from the 2022 Salary & Benefits Survey this spring! Many thanks to the INA and all the contributors for providing this important resource for our industry. A highlight was the 42% increase in the national average professional nanny pay rate from where it was in 2017. It’s wonderful to finally start seeing some progress toward caregiver wages aligning more closely with the value of their work.
On a less positive note, another trend we’ve been hearing is that cost is becoming a more common barrier for prospective nanny employers. The good news is there are some creative strategies that can help bridge the gap. One of those is incorporating non-taxable benefits into the compensation package to reduce the taxes paid by both the family and the nanny. Here are the most common benefits that fall into this category:
Healthcare
Families with only one employee can pay any amount up to the total cost of an individual health insurance policy covering the employee and their family. The contributions can be made either directly to the health insurance company or as a reimbursement to the employee.
Families with more than one employee are required to set up a qualifying Health Reimbursement Arrangement (HRA) when providing this non-taxable benefit. Take Command Health can help.
Cell Phone
Any amount up to the total cost of the phone and service plan can be reimbursed on a tax-free basis if the phone is used for work purposes as a requirement of the job.
Education Assistance
Up to $5,250 per year can be applied toward the cost of undergraduate or graduate tuition (and books) at an accredited college or university. Effective 2020, the benefit can also be applied toward the repayment of student loans.
Qualified Transportation
Up to $300/month can be applied toward the cost of a transit pass or commuter highway vehicle transportation between the employee’s home and workplace.
Note: There is no cap on the reimbursement of transportation expenses incurred on-the-job
Commute-Related Parking
Up to $300/month can be applied to the cost of parking provided to an employee on or near the worksite or at a location from which the employee commutes to work.
Note: There is no cap on the reimbursement of parking expenses incurred on-the-job.
Mileage reimbursement
Unfortunately, commuter mileage (miles driven between home and work) cannot be reimbursed tax-free unless the commute involves a qualifying commuter highway vehicle. However, miles driven on-the-job can (and should) be reimbursed at the federal mileage reimbursement rate – currently 65.5 cents per mile.
Making the financial piece of the family-nanny relationship work well is what makes us tick here at HomePay. So, when cost presents a barrier in the placement process, we hope you’ll reach out!
Our team is here to answer any questions, pull together budget scenarios for various compensation packages, and assist with benefit implementation.
- partners@myhomepay.com
- 877-367-1969
- https://partnership.myhomepay.com/
