There are generally three circumstances when a nanny receives a raise.

An annual raise given on their nanniversary, or the anniversary of their hire date.

baby raise given when an additional child is added to the family through birth or adoption.

An added duties raise when your nanny’s job description has changed substantially.

Annual Raise
It’s standard in the industry for a nanny to receive a cost of living (COL) raise on her nanniversary, the anniversary of her hire date. A nanny cost of living raise is generally between 2 and 3%, depending on your area. The national COL average is lower however since most nannies live in higher cost of living areas, the higher raise rate reflects that. A cost of living raise doesn’t actually give a nanny more spending power. It simply keeps her at a certain level of living, including basic expenses such as housing, food, taxes, and healthcare.

Many nannies also receive a performance based raise in addition to a cost of living raise. A performance based raise is generally between 3 and 15%. The actual amount is based on how well the nanny has done throughout the year. It takes into consideration her hands-on childcare but also how well she’s supported your family and household. This is where the short notice late nights, the always positive, pitch-in attitude, and entertaining Grandma during her 1 month visit is tangibly rewarded.

Baby Raise
When a family adds another child to their family, it’s standard for the nanny to receive a baby raise. A baby raise is generally 5 to 25%, depending on several factors including:

• how many children she’s currently caring for
• how much her duties will increase
• how much it will impact her current daily schedule
• any special needs the child has

The baby raise can go into effect at different times depending on when the nanny takes on the hands-on childcare and related tasks of the new baby. If the nanny takes full-charge of the baby immediately, the baby raise usually goes into effect when the baby comes home. If Mom is taking a maternity and caring for the baby while the nanny continues to care for the siblings, the raise usually goes into effect when Mom returns to work. If Mom and nanny work as a team during maternity leave, the raise is usually phased in, one half when the baby comes home and one half when Mom goes back to work.

Regardless of when the raise is applied, employers should talk with their nanny as soon as they begin to announce to family and friends that they’re expecting. They should confirm their nanny wants to stay on after the baby arrives (not all nannies enjoy infants), talk about how her duties will change and negotiate the baby raise then update your nanny contract to reflect the new job description, raise, and raise effective date. Doing this early on will make sure the discussion doesn’t get lost in the busyness that comes with preparing for the baby. And it will put the nanny’s mind at ease, knowing what to expect when the baby does come.

Added Duties Raise
When a nanny’s job description changes substantially (e.g. new puppy is added to the family, nanny takes on cooking for family), it’s standard for the nanny to receive a raise that reflects her extra duties. There is no standard amount for this type of raise. The amount depends on how much the employers and the nanny feel the task is worth. Remember to update the job description and hourly rate in your nanny contract.