Hiring household employees involves understanding the true cost of doing so. Each employee, whether they keep your home clean, care for your children, or manage your estate, will require a salary and benefits, but will also incur taxes in addition to providing long-term value. Today, we will simplify the many aspects that contribute to domestic staffing costs.

Salary

Any salary offered to a Household Manager or another potential staff member should be well-researched to ensure that it is competitive for the available role you wish to fill. This is important, as the salary you offer will determine how many well-qualified applicants you receive. 

Consider also that there are certain wage requirements, both on the state and local level, and that these can change more than once per year. Because of this, it will be important to check for changes after you hire.

Taxes

As a household employer, you should be aware that you must pay not only a payroll tax, but also federal and state unemployment taxes.The Federal Insurance Contributors Act, or FICA, requires employers to pay social security and Medicare, at approximately 6% and 2% of employee wages respectively. 

The Federal Unemployment Tax, or FUTA, will compensate your employees if they lose their job. This particular tax is 6% of the first $7000 paid to an employee. Finally, the State Unemployment Tax, or SUTA, also compensates employees who become unemployed, at a rate that will differ from one employer to another. 

Benefits

As an employer of domestic staff, your state may mandate that you offer paid time off, in addition to other requirements. In fact, a greater number of states are requiring these types of mandated benefits.

An example would be a requirement to provide full-time household employees with a set number of hours for paid sick leave per year.  

Insurance

Forty-nine states require employers to pay workers’ compensation insurance. This amount will provide employees who become injured while working with the proper coverage for their living, medical, and other expenses while they recuperate. This amount does vary according to industry and role, so research is vital to ensure the correct amount is being remitted. 

Long-Term Value

Although this can be more challenging to budget for, having an experienced employee over several years offers its own significant value. This is because they will not have to be replaced, but also because they possess an intimate understanding of your home and its requirements like no new employee possibly could. 

For example, an Estate Manager who has worked for you for many years will result in a seamlessly run, profitable, and perfectly functioning residence on a consistent basis. This level of estate mastery can only be achieved with time and experience.

The Numbers

While the actual cost of the domestic employee will differ, the following examples provide a general idea of the amounts that an employer may pay for salary and supplies when hiring a Nanny, Housekeeper, and other household employees.

Nanny

The cost of hiring a Nanny can range between $70,000 and $120,000 or more annually. Payroll fees can fall between $500 and $1000 per month. This employee may also need to purchase various items required for optimal performance of their role. As well, it is important to note that costs to employ a full-time Nanny will differ from one who is required on a part-time basis.

Housekeeper

Today, a Housekeeper can earn from $70,000 to $95,000 or more per year. In addition to the $500 to $1000 paid monthly in household payroll, this employee will require equipment and cleaning supplies, which may cost from $1000 to $2000 per year. Again, your actual costs will differ according to whether they work part- or full-time and whether they are a live-in Housekeeper.

Personal Chef 

The typical annual salary of a Personal Chef can fall between $100,000 to beyond $180,000. After the monthly payroll tax of $500 to $1000, your Chef will require kitchen supplies and grocery items, which may incur a cost of between $10,000 and $20,000 per year.

You will also want to consider that the costs of a Private Chef, who works only in a private home, will exceed that of a Personal Chef due to the exclusivity and other advantages they provide.

Of course, the numbers above only represent rough estimates that may not take individual skill sets, location, experience, or other qualifications into consideration.

Working with a Domestic Staffing Agency

Making a comprehensive plan that accurately determines the cost of hiring household staff is vital, as it will allow you to generate a realistic and more-than-sufficient budget. However, it is only one piece of a much larger puzzle. 

Items such as reimbursement for mileage, paid holidays, and generous bonuses, in addition to software and devices to calculate, run, and manage scheduling and payroll, not to mention generate government documents and file taxes, will also add to the costs of hiring domestic employees. 

Attempting to determine the true cost of employing any kind of household staff can quickly become overwhelming without the right help. Partnering with a household staffing agency like Staffing at Tiffanie’s can be your solution.

Our 28 years of experience has allowed us to refine a meticulous process that matches premier household staff with your home’s personality, work ethic, and personality. 

In addition, we also manage all aspects of the hiring process so that you do not have to compromise your lifestyle or downtime. We also arrange interviews around your schedule, and we draft an Offer of Employment for chosen candidates.

The client onboarding process reveals more about our service. We support and guide you at each step so that you can make informed hiring decisions and ensure that your privacy is a top priority throughout.

If you are an experienced professional seeking placement, we invite you to apply to join our household staff agency roster, which offers many career benefits. You may also view our current list of available positions.