Living in the DMV area, parents can expect to pay high sums of money for proper care of their children. But exactly how high is it, really? And what’s the actual reasonable cost?
The Washington, DC metro area is one of the most expensive for child care in the country, costing upward of $23,000 a year for a single child, according to nonprofit Child Care Aware of America. In fact, according to the Economic Policy Institute, the District is ranked first, ahead of all 50 states, for the most expensive infant care in the nation, exceeding the annual cost of tuition to a four-year public university.
While child care can range from day care centers to babysitters, hiring a nanny is highly common in the NoVA area. But as times change and prices increase, it becomes harder to navigate the process.
Most nannies in NoVA work 40 to 50 hours a week, with salaries typically averaging from $20 to $25 an hour, according to both Metropolitan Nannies and White House Nannies, two child care agencies who serve the Northern Virginia region.
Both agencies work with local families and nannies to gauge the market and eventually find the best match for children in the area through background screenings, tests and interviews.
“There’s been a big change in the market, partly because of technology,” says owner of White House Nannies, Barbara Kline. “Parents want their nannies up to date and they want to know that their nanny can share information with them. It’s not so much leaving a long list of to-dos like it used to be. The good nannies go in and know what they need to be doing.”
According to Kline, the best nannies will stand out by doing things like making homemade food for the baby, preparing meals for the weekend and engaging with the children on a regular basis.
Here in NoVA, the better the nanny, the higher the pay; however, the agencies don’t choose the cost of services. Rather, families negotiate with the nanny to see what will work best for both parties. When deciding the proper amount, there are a number of factors involved.
“We ask nannies why they think they deserve that amount, which could be based on education, experience and, most often, its based on demand and location,” says Jackie Wood, owner of Herndon-based company Metropolitan Nannies. “Nannies that work in Washington, DC would cost a lot more than those in Arlington, even though they’re neighboring cities.”
While babysitting typically doesn’t require a tax reduction in salary, it is state and federal law that nannies be taxed by both the federal unemployment tax and the FICA tax, according to Jay Shulze, owner of HomeWork Solutions in Sterling. Shulze and his staff specialize in providing household employers with nanny tax compliance.
“We tell people, in general, they should plan on paying somewhere between 10-15% in taxes,” Shulze explains. “We find that families tend to think in terms of cost per year without factoring in taxes. They may plan on spending $40,000 a year on care for two kids, with an hourly rate of $20 an hour, and then they are surprised when they end up spending $43,000. But they didn’t include gross wages.”
On an annual basis, nannies can make anywhere from $30,000 to well over $50,000, even after a tax reduction, according to Shulze. For a better understanding of nanny tax, HomeWork Solutions has a Virginia tip sheet with useful information.
As the market continues to grow and become more competitive, the industry as a whole remains complicated, in that many nannies are being met with a reduction in salary, according to Kline.
“This is the one field you could be working in for 10 years or more and not make more money as you move on to the next family,” Kline explains. “Many nannies are in the position of having to make less money than they were making when they turn to a new family.”
Despite the challenges, the child care industry continues to boom in Northern Virginia.
“Every year the market goes up,” Wood says. “So long as there’s high demand and low availability, nannies will hike up their prices as much as possible.”
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