With the holiday season quickly approaching, it’s time to consider a holiday bonus for your nanny! Holiday bonuses for nannies are not required, but it is customary in the household employment industry to give nannies a bonus near the middle-to-end of December, no matter what holiday the family (or nanny) celebrates. Whether you call it a holiday bonus or a year-end bonus, giving your nanny an annual bonus every December is an excellent way to show your appreciation for the important role they have in your lives!
How Much Should the Holiday Bonus Be?
The National Domestic Workers Alliance recommends that the holiday bonus for the household employee should be equal to one to two weeks of their gross weekly pay. When considering which amount feels “right” as a holiday bonus for your nanny, consider factors like the nanny’s job performance, how long they’ve been with your family, and how much you as the family can afford to give annually.
If your nanny has been employed with you for under a year, it’s appropriate to prorate their holiday bonus accordingly. One option could be doing a full day of gross pay for every month the nanny has worked with you for a full-time nanny (ie. 6 days of pay if they’ve been with you for 6 months) or ½ day of gross pay for every month your part-time nanny has been with you (ie. 3 days of pay if they’ve been with you for 6 months).
If your nanny has been with you for multiple years, try to be consistent with the bonus from year-to-year. As your nanny’s hourly rate increases, so will their annual year-end bonus, so it’s helpful to plan ahead and budget if needed so that you can be as consistent as possible with the amount given each year. If you can give more than last year, amazing! But if the bonus has to be less than last year—which could be due to many factors, including job performance or your family’s finances—please explain to your nanny why the bonus was less this time around to eliminate, as much as possible, any confusion or frustration.
What if I Can’t (or Don’t Want To!) Give My Nanny A Bonus?
If your family’s finances are making it difficult to pay a bonus this year (or as much of a bonus as you’d hoped), explain to your nanny that the decision was a financial one and not related to their job performance or your satisfaction with them as an employee. Provide a thoughtful holiday gift instead, and, if you can, give them extra PTO time to use next year to make up for the lack of bonus this year.
If the nanny’s job performance means they are getting low or no bonus this year, it’s time to have a discussion with your nanny. If you aren’t happy with your nanny’s performance but still give a generous bonus, it may send the wrong message that things are fine and provide a false sense of job security. Instead, you may want to schedule a sit-down review with your nanny to discuss what’s going well and what areas need to be improved. Don’t worry—we can help! Email Jaynie at firstname.lastname@example.org to get more information about doing a performance review with your nanny.
What’s the Best Pay to Pay the Holiday Bonus?
Legally, any bonuses given to your nanny, since you are the employer, are considered taxable income, not a gift. It’s very easy to add the bonus to your payroll when updating your nanny’s pay if you use a payroll service—there should be an area to add a bonus if using an app or online system to report your nanny’s pay, or you can call the payroll company and they can take care of it for you!
If you are clients of GTM Payroll, it’s very easy to add the bonus using GTM’s HomePunch timekeeping service or by calling 800-929-9213.
Adding the bonus to your usual payroll will make sure that the appropriate taxes and FICA fees are paid. Please note, however, that this decreases the amount of money your nanny will actually receive of their bonus. Some families choose to add a little extra to cover some of the costs of taxes and fees. Either way, it’s helpful to make sure nanny knows and expects that their bonus is taxed and that they will see those details reflected on their paycheck stub for that pay period.
What About Other Holiday Gifts?
Giving your nanny a holiday present—whether in addition to a bonus or given instead of a bonus—is an excellent idea. Inexpensive, thoughtful gifts help a nanny feel like they are truly a part of your family, making them feel loved, seen, and included.
Consider a framed photo of your nanny with your children, a gift card to their favorite restaurant or store, a book, appliance, or other item you know they’ve been wanting, or a gift basket with their favorite treats. Include the kids, too! Presents from your children are deeply appreciated, being more meaningful to the nanny than anything you could purchase at a store! Help small children create a handmade present and have older children bake cookies or other goodies. You can also include your children when shopping so they can pick out things they know their nanny will love!
Other ideas could be paying for a year’s subscription to a streaming service they want, a year’s subscription to a monthly gift box (books, makeup, and self-care boxes all make great options!), offering to pay for a training or class they’re interested in, or gifting them some extra days of Paid Time Off to use around the holidays or to add to their PTO for next year.
Any holiday gift, big or small, will bless your nanny and communicate your appreciation for all they do for your family!
Have Questions or Want More Ideas For Holiday Gifts?
We would LOVE to help you show your nanny as much appreciation as possible this holiday season, so please do not hesitate to reach out if you’d like to talk more about year-end bonuses and holiday gifts! Email Jaynie at email@example.com to start a conversation.