It's a common question to
ask whether the cost savings of a live-in nanny are worth giving up the space
in your home and having another person live with you. If you're like me and my
husband then you see having an extra person in your household as a wonderful
way to enhance your family community, but for those of you who may be feeling
apprehensive and want to see the cost-savings analysis, I've drawn one up for
you. Check out my post on 7 Reasons Why a Live-in Nanny is a Great Childcare Option
for added insight into the benefits of a live-in nanny.
**You may be wondering about
additional expenses such as utilities (heat/hydro) and groceries. When I
originally wrote this post and researched these costs over a year ago, I
factored them all in, but what I can now say after having our nanny live with us for several months is that
because she comes from a country that is cost-conscious, our expenses in these
areas have stayed the same, and in some cases even decreased.
*Based on 40 hour work
week and monthly payroll in Ontario
LIVE-IN COST (Monthly)
Universal
costs:
Net employer cost----------$2,087
Net employer cost post deductions
of CPP, EI based on $11/hour. True cost approx. $150 less each month based on
$7,000/year tax credit. See post on Our Set Up, Cost & Tax Deductions Info
for full breakdowns.
WSIB----------------------------$50
Protects employer and employee in
case of accident/injury. I found this site that I found helpful: http://dcy.ca/wsib-nannies/ or
you can visit the WSIB website.
One
time costs:
Nanny bedroom TV----------$250
Costco: Samsung® 28-in 720p LED
Nanny laptop------------------$400
2nd hand MAC or new PC
*We will be providing our nanny with her own computer, but this is optional
Nanny flight-----------------$1,200
From Hong Kong, relevant if
unable to secure domestic nanny and sponsoring abroad
LMIA------------------------$1,000
Relevant if unable to secure
domestic nanny and sponsoring abroad
Medical insurance------------$180
You must provide your nanny with
interim medical insurance during the 3-month waiting period prior to OHIP
coverage. *Cost for 3 months
Total one time costs: $3,030
Benefits
that we offer our nanny that don’t cost us anything:
Wi-fi. We have unlimited
bandwidth, but you should consider the cost of switching to unlimited if you
don’t currently have it so that the nanny can Skype with family and friends.
Netflix. Can have up to 6 people on
each account and 2 simultaneous watchers at a time.
Additional/optional
costs that may be applicable for your family:
Cell phone----------------------$40
Tax deduction service---------$50
Options range from $35-60/month
with nannytax.ca. Check out Our Set-Up, Cost, and Tax Deductions Info for
full details. I'll also be posting soon doing a cost comparison of all of the
different tax services.
Transportation allowance-----$40
We’re offering an additional
incentive of 8 tokens/month
Transportation costs-----------$40
If you live in an area where
activities/programs/outings for nanny and your child are not walking distance.
Total Monthly Live-In Cost: $2,137-2,307
*For families who have obtained a positive LMIA prior to Nov 30, 2014 and are deducting room/board, the total cost is $1,768-1,938
DON'T FORGET: The above cost structure offers a comprehensive look at the big picture of having a live-in nanny, however it may be helpful to know that our cost for a live-in nanny that works 35 hours/week is $1,400/month (which includes wages, CPP/EI contributions, WSIB, and NannyTax service). There has been no increase in our grocery bill, our utilities bills have gone down, and we are also saving approximately $250/month on eating out. SEE my post HERE on our family's costs.
LIVE-OUT COST (Monthly)
Universal
Net employer cost--------------$2,780
Net employer cost post
deductions of CPP, EI based on $15/hour. *True cost approx. $150 less each
month based on $7,000/year tax credit. *Live-out nannies typically make between
$14-16/hr, but can charge as much as $18/hr in some metropolitan areas.
Groceries----------------------------$50
Based on lunches.
WSIB--------------------------------$50
Protects employer and employee
in case of accident/injury.
Additional/optional costs that
may be applicable for your family:
Tax deduction
service-------------$50
Options range from $35-60/month with nannytax.ca. Check out Our Set-Up, Cost, and Tax Deductions Info for
full details. I'll also be posting soon doing a cost comparison of all of the
different tax services.
TTC Metropass (or equivalent)-$120
Total Monthly Cost of Live-Out Nanny: $2,880-3,050
Thanks for starting up this great blog! Just thought I'd note that given that off peak electricity times are usually 7 pm to 7 am Mon-Fri and all through the weekends and public holidays, having your nanny do the laundry could actually cost you more unless she works very unusual hours.
ReplyDeleteHi Rhiannon! Thanks for reading and providing feedback. I'm thrilled to hear that you like my blog! :-) You make a great point about the laundry. I forgot to think outside of my own situation on that one. Our future nanny will be working slightly more unconventional hours, as my husband and I do as well, but it is a great point that this won't apply to many other families, thanks again for sharing your insight on this and happy reading!
DeleteHi there, thanks for your blog. It's a great resource. Was wondering if you can provide more clarity on room and board deduction. It seems in your calculation you are adding in groceries and utilities as well but I thought that would be all under the room and board deductions. Would it be considered double counting?? Thanks!
ReplyDeleteThanks for your comments and I'm glad to hear that you've found my blog helpful. :-) With regards to the calculation, I can see how it may seem like double counting, but keep in mind that these are opposite functions (the room and board calculation offers a surplus to you vs. the groceries and utilities which come at a cost). The reason I've done it this way is that it provides a more accurate calculation. The government allows you to deduct $85.25 for room/board weekly, but this is just a general number (ie. it doesn't necessarily reflect actual cost) so what I've done is calculated the room/board in to the net salary cost (as if it just general revenue) and then deducted the actual cost for groceries and utilities. This way you get a more accurate number. Does that make sense? Feel free to email me if you'd like further clarification.
DeleteGreat information! Now that there are the proposed changes to room and board deductions, can you recalculate taking that into account?
ReplyDeleteThanks for posting. I'm just giving some thought as to the best way to go about making this change as employers under the old program will continue to deduct room/board. Thanks for pointing this out though, I'll reflect the change shortly.
DeleteHi. Do you have more information on paying the tax portion for live-out. Is this something we should automatically offer? Or is this something they should ask for? Also, would we need receipts for their services for tax time? Great blog! Thanks :)
ReplyDeleteThanks for your positive feedback about the blog Rory (love your name!) and my apologies for the delay in reply. I'm actually going to have an accountant guest posting shortly, and I will include this in the topics for her to cover. My understanding is that you just keep the submission stubs for the tax deductions, and the paper trail of wage payment, but I'll have the account delve deeper into who manages which deductions when the nanny is part time. I hope that's helpful.
DeleteHi! I don't know if you are aware of the new rules for live in caregiver because since Nov. 30th of 2014 you can't charge room and food for the caregiver even if you want her live in.
ReplyDeleteHi there,
DeleteThanks for reading my blog and for your comment. :-) Yes the new rules are reflected in the post, in fact it says in large bold letters that the calculation is based on no room/board charge, and then provides a secondary calculation for those families who are under the old rules.
Hi Jenn, our live in nanny is leaving us in the next few months. She was hired in 2013 and she pays us room and board. If we hire a new live in nanny, can we still charge for room and board? I have heard mixed info. Please help clarify. Thanks!
ReplyDeleteHi Natasha, thanks for your question. Unfortunately, you cannot charge room and board under the new rules. I will say that I have heard of some families making arrangements under the table with their nannies to have them chip something in for room/board, but by law you are not permitted to do this. It is so unfortunate as it makes the cost so much higher for families, and I don't know any other industry where employees get to live somewhere completely for free, but perhaps the liberal government will fix the reform over time, one can hope. Best of luck on your recruitment journey for your next nanny!
DeleteSo nannies hired prior to the rule change on room and board deductions can continue to deduct? The no deduction rule only applies to new hiring?
ReplyDeleteYes exactly. Nannies hired prior to the rule change are still subject to have room/board deducted, but nannies hired after the rule change must be provided with room/board free of charge.
Delete