When I originally thought of this series, I had intended it to be the three parts we’ve already had. But incoming questions seem to revolve around a few key concepts, so I’ll keep posting these as those questions come in. One of the most common groups of those questions is around expenses.
Going through the process ourselves, we mostly figured it out as we went along. Which is a good way to figure out most things in life, but a poor way to plan a budget. So below you’ll find what I hope is a pretty comprehensive list of various expenses you will or might incur when bringing your nanny back from overseas with you. I haven’t put specific amount since so much depends on individual scenarios. But this should give you at least a starting point to be able to calculate the true cost of bringing someone back with you, because realistically, you will be the one to shoulder the bulk of it.
Depending on where you’ll be arriving from, the biggest cost is likely to be a transition from whatever wages you were paying in your post country, to prevailing wage in the United States. After that, especially depending on your nanny’s age, health care costs are most certainly a factor as well. USCIS fees, taxes, payroll provider fees (if you use them) and required benefits like travel add up as they are reoccurring, but can be planned for.
The one cost we didn’t plan for in advance is the cost of back up care when our nanny was traveling home for her vacation time. We actually had good back up options for a part of the time through my own employer, but haven’t had that while abroad. Double paying a nanny salary (vacation time plus whatever you’re paying for back up care) can certainly sting the budget a bit, so best to plan for that as well if you will need additional coverage outside of what you can provide yourself or through your family.
In the end, if we had to do it again, we would still do it the same way – for us, despite a few hidden or unexpected costs here and there, having the consistency of a reliable person that our family knew was worth so much more than those. And since we came back home to downtown DC, the comparative going rate for a nanny to provide the amount of coverage that we needed would have been much higher. However, whether a cost is “worth” it really depends on each individual’s situation. This list is aimed at helping you make that decision for your own family, with as little surprise as possible.
Did we forget anything? Leave your thoughts in the comments!
(PS – I haven’t figured out yet how to make it into a handy-dandy downloadable PDF, however, at the bottom of this post, you’ll find a “print” icon if you’d like to have a hard copy of this list to work off of)
Salary Related Costs:
- What is the hourly wage you will offer? (make sure to account for prevailing wage and amount of hours you will realistically need – remember, you can not “salary” a nanny or care employee in the US; they must be paid hourly)
- Will overtime be paid at hourly wage or time and a half? (review your state requirements for overtime, and don’t forget to consider if the person is living with you in-house)
- Remember, use a realistic estimate of how many hours you’ll need and use plus some overage to account for any surprises
- Estimate your holiday and anniversary bonuses if you plan to give them (remembering that they will be taxed at about 40%)
Tax Related Costs:
- Will you deduct taxes from your nannies wages or will you gross up her wages to account for taxes?
- Taxes that you will have to pay for your nanny as her employer
- Taxes that you will have to pay yourself for being an employer (i.e. what effect will it have on your personal returns?)
- While not obligatory, you should consider if you will use a service to do:
- Payroll processing
- Tax filing processing
- If you use a provider for the above, fees are usually quarterly, but you can have additional fees for:
- Initial set up + registration
- End-of-year tax filings
- End-of-year individual tax return prep for your nanny
- Direct deposit fees
- Changes in fees depending on if you pay weekly or bi-weekly
B1 Related Costs:
- USCIS Processing ($380 every 6 months)
- Room & Board: the B1 visa process requires that you provide room and board however, it doesn’t specify how you must do it. In order to account for this, consider:
- If you’ll have to return home to a larger space because of housing for your nanny; or if you prefer “live-out”, then what the cost of providing a separate apartment of living quarters would be
- For board, will you allow a separate food budget or simply plus up the groceries and meal preparations that you normally otherwise do for your family?
- You might be able to deduct for room and board, depending on which country the visa was issued, but you will have to prove that those are reasonable and in the contract usually in advance. Also, post deductions, salary still has to meet mimimum/prevailing requirements, I believe. This could likely quickly get complicated so please check with tax or employment professional before proceeding.
- Flights for arrival to US and departure from US to home point for duration of your stay in US
- Health Care Costs:
- Monthly premium costs:
- Will you pay monthly or pay a full year up front?
- Will you cover the entire monthly premium or cost share?
- Will you cover co-pays/deductibles?
- Will you cover prescription medication or prescription insurance?
- Monthly premium costs:
- Transportation costs (metro card? monthly pass? etc)
- Vacation time coverage (who will cover hours and at what cost when your nanny is on her PTO?)
- Coverage for federal holidays/holiday schedule
Additional Optional Benefits/Expenses:
- Annual “home leave” trip (round trip airfare or miles to their home leave point)- this would be outside of the ticket you provide to arrive and depart in the US but is often a customary (and much appreciated) benefit (i.e. one trip “home” a year – in some countries out side of this US, this is required)
- Dental Insurance or dental check ups
- Mobile phone and/or data plan
- Internet/WiFi access
- Calling cards for international calls
If you missed the other posts in the Nanny Series, check out:
- The B1 Domestic Worker Visa Application Process
- Stateside Processing for B1 Domestic Worker
- How to Ensure a Smooth Transition to the US for your B1 Domestic Helper
Author’s Note: Please be advised that this series is meant to shed some light on the process of bringing a domestic helper back with you from post or other foreign assignment as part of the B1 Domestic Worker Visa program. This is not official, legal, or immigration guidance. As always, please check with your local consular section, tax professionals, federal regulations and official state laws related to domestic employment for the most updated information and requirements.