Why I Hired a Nanny

child asleep in stroller

Let’s start with some word association.


What is the first thought that pops into your mind? Do you picture Mary Poppins or Maria from The Sound of Music (I guess Julie Andrews plays a good nanny)? If you were raised in a lower or middle class family (like I was), do you dismiss nannies as an overindulgence of the rich who don’t wish to take responsibility for raising their own children? Did you have a nanny growing up and consider her part of the family?

Over the last twenty years, I have been fortunate to harness the effects of upward mobility. My former working-class, rural upbringing has morphed gradually into an upper-class, urban existence. The beat-up used cars and cramped row homes of my youth have been replaced with BMWs and six-bedroom Victorians. Another new experience—unheard of in my childhood but common among my current friends and neighbors—is the use of nannies.

With the arrival of our daughter this summer, we knew a crossroads was approaching. As full-time working parents, one child in daycare is doable from a scheduling perspective. Two children—one in daycare and one at a different location in preschool—is a daunting prospect at best. After months of hemming and hawing, we came to the conclusion that hiring a nanny is the best option for us.

Before discussing the pros and cons of hiring a nanny, let’s dissect the nontrivial process of finding and hiring a nanny.

How to find a nanny

I’m comfortable doing most of my own research before a large purchase. However, you can’t yet buy nannies on Amazon (at least not until Robonannies become a thing). Most people find the nanny of their dreams in one of three ways:

  1. Word of mouth. In talking to quite a few nannies, this is surprisingly common. We spoke to a nanny with twenty years experience who had never been formally interviewed; she had always been referred by word of mouth to another family when her current family no longer needed her services.
  2. Self-directed search. Websites like Care.com have made the nanny finding process more accessible for do-it-yourselfers. Simply set up an account, plug in your criteria and location, and browse away. Our good friends found their nanny this way.
  3. Nanny finding service. For those who would prefer a little more hand holding, a nanny finding service is the way to go. From start to finish, someone will help you navigate the sea of potential nannies to find the perfect fit for your little angels.

In many parts of my life, including personal finance, I am a do-it-yourselfer. To find our nanny, however, I chose to utilize a service. That choice cost me $1850 (the fee charged by the nanny service), which I felt was worth every penny. What exactly did we get for this admittedly large chunk of change?

  • The process began with a two-hour discussion between the director of the nanny finding service and us. Through a series of questions (and harsh, unspoken judgements), she “got a feel” for what type of nanny would fit our lives and personalities.
  • The service maintains a large panel of pre-vetted candidates who the director has interviewed extensively. All nannies have undergone a comprehensive background check, employment verification, reference check, and (presumably) a flea and tick check.
  • The director assisted with determination of an appropriate job offer, including salary, vacation, and benefits. Our position was then advertised to local nannies.
  • We interviewed eight candidates and found a wonderful young woman to help us.
  • Following our decision, the nanny service provided a sample employment agreement as well as guidance with taxes.
  • If our chosen nanny does not work out, we receive a partial credit of the fee toward finding another nanny.

I would guess it might have taken us 20-30 hours to perform the equivalent work of the nanny finding service. Well worth the money and peace of mind in my opinion.

child alone on beach

Becoming an employer

After the choice was made and employment agreement signed, it was time to address the less glamorous side of hiring an employee: taxes. Some choose to (illegally) pay nannies under the table, i.e. without taxes. One of the candidates we interviewed and otherwise quite liked strongly preferred to be paid this way—a deal breaker for us. When our nanny agreed to be paid “over the table,” we breathed a sigh of relief.

So what is involved in paying taxes as an employer? Quite a bit, it turns out.

  • Obtain a FEIN (Federal Employer Identification Number) as an alternative to a social security number in the reporting of nanny taxes
  • Calculate and withhold employee federal and state income taxes
  • Withhold FICA (social security and medicare tax) from employee
  • Calculate and remit employer FICA (7.65%)
  • Calculate and remit employer FUTA (Federal Unemployment Tax), which is 6.2% of the first $7000 employee earnings
  • Calculate and remit Pennsylvania’s State Unemployment Insurance (tax) of 3.6785%
  • Remittance of all these tax payments on a quarterly basis
  • Furnishing W2 for employee and Schedule H for us each year

In the end, we decided to use a “nanny tax service” at the cost of ~$1000/yr. I know, I know. But for this fee, they direct deposit our nanny’s paycheck after automatically withholding the appropriate taxes; collect and remit all federal and state taxes (employee and employer) on a quarterly basis; and provide and file all the necessary tax paperwork come April.

According to the IRS, the average family spends 50-55 hours per year dealing with nanny tax issues. Given the perpetual time and effort involved, outsourcing this activity was a no brainer for me. The whole point of hiring a nanny was to make our lives less difficult; why would we shoot ourselves in the foot with extra work and stress at the last minute?



If this all seems like a huge pain in the ass, it is. But now let’s dig into the reasons why we decided to endure this ass-pain (i.e. hire a nanny) in the first place.

A nanny is essentially a third parent. Ours will be the primary caregiver for our infant daughter during the day, and pick our son up from preschool in afternoon—saving us a potentially frantic drive to get there on time. We can walk in the door relaxed and ready to spend the evening with our children.

Worries about childcare on snow days, sick days, inservice days, or school holidays have gone out the window. Running late at work? No problem. Our nanny could even bring the children to their doctor’s appointments at my wife’s office while my wife works. Life will be gloriously less hectic.

Although the nanny’s primary duties will be related to direct childcare, it is—according to our nanny finding service—customary for the nanny to perform a few other household duties. Ours has agreed to do children’s laundry, tidy up around the house, perform basic food preparation, and—most exciting for yours truly—clean dirty bottles! (For some reason, I hate cleaning bottles with every fiber of my being.)


The obvious Mega-Con of employing a nanny is the money. After salary, state and federal taxes, nanny tax service fee, overtime pay, bonuses, and mileage reimbursement, I am looking at an additional annual cost of ~$38k straight in the face. Ouch.

Another concern and potential negative is the reliance on a single, unsupervised individual to care for our children. Compared to the highly regulated and public setting of our former daycare, it seems like much more of a roll of the dice. At the extreme end of the spectrum, child abuse is more likely to occur undetected: an unlikely but horrific thought.


Before deciding to hire a nanny, we considered the scenario in which my wife worked part-time, our daughter went to daycare, and our son to preschool. In short, it didn’t work. To pick up our son from preschool, my wife would need to leave the office at 3pm each day. Guess when peak patient hours for pediatricians begin? Right when she would need to leave.

At her practice, part-time work is structured as full days of work (until 5pm) alternating with days off. Pick up at 3pm would remain a problem on full days, and we would still be up the creek on a sick day or snow day. The icing on this nightmare cake is that our daughter would be in daycare at a separate location, with her own possible sick days looming. Part-time work simply does not mesh with our childcare needs.

After much deliberation, we concluded that the two best options for us were:

  1. My wife continues to work full-time, and we hire a nanny
  2. My wife quits work and assumes full-time child care

Working full-time, my wife’s annual take home pay is ~$98k. The total annual cost of our nanny is ~$38k. From purely financial standpoint, we are $60k in the black after nanny costs. Perhaps more importantly, my wife was not quite ready to completely hang up the stethoscope.

Could we have pulled it all off without a nanny? Sure—with a little sweat, tears, and more tears. But we decided that the relatively high price of a full-time nanny was worth the reduction in stress and addition of sanity to our lives.

Do you employ a nanny? What factors played into your decision? How much do you pay for a nanny in your geographic region?

23 Replies to “Why I Hired a Nanny”

  1. Sounds like you and your wife researched this very thoroughly and came to a great decision! When I go back to work (we have 1 year parental leave in Canada) we will have to figure out what to do for childcare.

    1. I am super-duper jealous of your parental leave, my northern neighbor! Can you split it between parents in any way you like?

      Childcare is one of the most difficult decisions that working parents face, in my opinion. There is never only one “right” answer for a given situation, but many equally viable options. Hope you find one that works for you!

      Thanks for taking the time to read,
      Dr. C

  2. This is a super helpful, informative post! I love being able to see the full breakdown and steps for what’s involved with hiring a nanny. I’m glad your wife is able to continue to work. If the time came for me, I’d like to continue to work, as well, although I’m too scared to check nanny prices in NYC.

    Also, is that a picture of your real kiddo? Too cute.

    1. For the moment, a full-time nanny and full-time work is our best option. The calculus will likely change when our daughter starts school in about 4 years, because we won’t need a nanny during school hours anymore. If I learned one thing as a parent, it’s that as soon as you get comfortable in a situation, it is apt to change 🙂

      The last pic is my baby daughter. I am biased of course, but I think she’s gorgeous. The other two pics are my older, adventurous son who is almost four now.

      Thank for stopping by, TLS! Hope you had fun in Cincinatti (sp?)
      Dr. C

  3. Hopefully as a Radiologist (based on the radiologists I know–I also strongly considered the field), you get a decent amount of time off to spend with the little ones as well. Maybe that could offset any time away from the kids while they are growing up.

    1. Yes, I am lucky to get a lot of time off, which is why we didn’t really consider me going part-time instead of my wife. Plus, I make almost 3x my wife’s salary (not that I’m saying it’s justified). If all goes as planned, I’d like to go part-time before the kids start to hate me as teenagers.

      Vielen Dank!
      Dr. C

  4. I forwarded this post immediately to my wife. I am on board with the nanny, but she is on the fence. She makes about 50K as a part-time PA so she would basically be working to get the nanny, although she might not need full-time nannying (its a word). Lots to chew on,

    As usual, great research and well placed humor (ticks and fleas, hehe). I had no idea there was a nanny tax service. I would outsource everything you did, no doubt. Also, I’ll wash your bottles if you take over tooth brushing time. Since the new one was born, our daughter drags out post-bath time as long as possible to maximize that one-on-one attention with daddy. Think 30-60 seconds to squeeze the toothpaste. So painful….

    1. Ha! I feel your pain with the toothbrushing. We are learning to spit without spraying the mirror.

      We were both initially resistant to the idea, but the more we discussed it, the more we realized it made the most sense—and perhaps was the only real option for our sanity.

      This may vary by location, but we had trouble finding a part-time nanny/babysitter. Most nannies in our area seem to want to work full-time. Good luck!

      Dr. C

  5. We are also dual physicians with 3 kids and childcare continues to be a huge money suck. $38k sounds great though. Sadly, we are HCOL area and most experienced nannies want $20/hr for 2 kids. For us, we needed 50+ hrs/week, you can do the math and see what we were paying ‘under’ the table. We now have one in public school, and two in part-time daycare with an au pair. The flexibility of having an au pair can’t be beat (we both take call). We treat our au pairs very well — please, please treat those who care for your children like family! Hopefully Trump doesn’t destroy the au pair programs. Since being with our current au pair has seen more of the US then we have!

    1. @barelybarefoot I guess that the math still works out in your favor if both spouses keep working? Likewise, the toughest aspect for young’ish physician parents is that all of us spent a good deal of our lives working and studying to get to where we’re at. It always seems like a shame to put this skillset on the back burner to raise our kids. Never an easy decision.

      1. @barelybarefoot You are right, we are in a MCOL city, and the going rate for full-time nannies is about $18/hr. Plus, I get a lot of time off (radiology, baby) and we are only paying for the equivalent of 35hrs/wk. I echo your sentiment: I want the person taking care of my children to be the happiest person in the world!

        Good luck in the future. Hopefully things will simplify as your children get older.

        @smartmoneyMD White Coat investor and Physician on Fire had a Q&A recently about the guilt of early retirement or part-time work, with some robust comments afterward (I’m guessing you probably saw this):


        Personally, I don’t feel any guilt with “wasting” my skills on an early retirement. But if I possessed a very specialized or particular skill set in my speciality that I felt patients would have difficulty finding elsewhere, I might feel differently.

        Thanks you two for reading!
        Dr. C

  6. […] Meanwhile, Dr. Curious of My Curiosity Lab dropped $38,000 a year on a nanny, or about as much as we’ve spent on everything the first 9 months of 2017. Let him explain. Why I Hired a Nanny. […]

  7. Dualincomedocs says: Reply

    I am also part of a dual physician couple. We hired a nanny through word of mouth, and it has worked out great so far. We are paying similar to what you do. To us, the cost has been completely justified.

    Knowing that our son gets excellent care, gets adequate sleep (without being woken up to go to daycare), and that we get to maximize our time with him without having to worry about cleaning/dishes/laundry is priceless. I could only imagine the additional stress to our lives coordinating daycare

    We are happy to do this as long as it’s necessary. That said, if our current nanny were to ever leave and we still had young kids, I don’t know what we’d do as I’d be back worrying if we could find someone good again. I hope that doesn’t happen because I don’t know if either of us is willing to give up our jobs that soon!

    1. Thanks for sharing, Dualincomedocs. Our older son was in daycare and luckily (or unluckily, depending how you look at it), he was an early riser as an infant and early toddler. Of course, now he sometimes sleeps in too late when he actually has to arrive at preschool at a predetermined time!

      It feels a little weird to have someone help with household chores, mostly because we never had it growing up. But our nanny seems happy to do it (without us asking), so we are embracing it.

      Good luck!
      Dr. C

  8. One other consideration that I didn’t see mentioned above is the loss of privacy with a “live in” or full-time nanny. Children are one thing, but a nonfamily member in the house is another. Nanny’s are people, too, and come with their own problems. Did you discuss that aspect ahead of time? Has it been a factor?

    1. Good point. Our nanny is not live-in and we are passing off the kids in the morning and evening, so there is relatively little time during which we are all together. So far, she seems to mesh well with our personalities (that is part of the reason we chose her). I could see these issues being more of a potential problem with an au pair or live-in nanny, for sure.

      Thanks for reading, Andrew!
      Dr. C

  9. Out of curiosity, did you ever consider the possibility of you staying home with the kids while your wife continued to work?

    1. He makes triple her salary and gets more time off yearly. No brainer, but also one of the reasons women in medicine get the short end of the stick……

      As an aside, we realized after our fourth was born that the daycare shuffle was killing us. We had good and bad experiences with au pairs (one wrecked the car—no kids in it thankfully), one left right at the holidays two months before her term expired… Our last one though stayed with us for two years and became part of our family. She was awesome and the kids talk about her and their experiences with her still several years after she moved on. Having someone live in your home is tough, but the flexibility of the hours worked (driving to sports practices alone was worth it…) is great.

      1. I realized my ‘short end of the stick’ comment is unclear. I didn’t mean staying home with kids, I meant from a salary standpoint. Women in medicine make less than men in general. This is one of the reasons why….

      2. @Solitary Diner: As I mentioned in one of the comments above (and as Eric said), the salary and time off of my job meant we didn’t really consider the option of my going part time. Plus, I quite enjoy my job, while my wife “tolerates” hers. I suspect at some point—maybe when our daughter starts preschool—she may decide to go part-time or even quite. This decision would also depend on our finances, i.e. how close to financial independence we are at the time.

        @Eric: We thought seriously about the au pair, but for multiple reasons—the relatively small size of our home being an important one—we decided against using live in help. The thought of providing food for another adult was unappealing to us as well.

        I could imagine an au pair might be a better fit in the middle school years (school pick up, shuttling to practices, etc), so perhaps we will revisit it at that point.

        Thanks for reading!
        Dr. C

  10. […] Curiosity Lab: Why I Hired A Nanny — Dr. Curious shares his experience of hiring a nanny for their two children. This is not an […]

  11. I am also part of a dual physician family with 3 kids under the age of 3 with a nanny. I’m a radiologist with a 4 day work week, no call, no weekends and my wife has the same schedule – we still have a nanny. We have the older 2 children in a montessori school and the nanny has the youngest at home. We’ve done this for each child and it has been great. Although this is expensive it allows the older ones social interaction, keeps the infant sheltered, and allows the nanny to clean the house while the infant is sleeping. Its expensive, but this stage wont last forever. Money is a tool and if it can be used to reduce stress then you have found a good use. I doubt you will find any other $38k expense that can reduce your stress level the way a good nanny will. Considering your part of the FIRE community, I know this was a tough decision. However life is a journey – not a destination, and that realization has changed the way I view the FIRE path recently.

    1. You are spot on. We are only a few weeks into having a nanny, and I am beginning to notice the beauty of coming home to a tidy house, with kids clothing washed and folded, and most of the dishes done. At first we were almost resistant to accept the help, but she seemed happy to do it whether we asked or not.

      Our feelings of discomfort—mostly due to a lack or prior nanny experience—are slowly fading as we recognize that we are paying her for her time. We constantly express our sincere appreciation.

      It has put a small dent in our FIRE plans, but what is the point of retiring a few years earlier if the years in between are a hectic mess. In my initial assessment, a nanny is money well spent.

      Thanks for reading!
      Dr. C

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