Daycare is expensive, even here in Quebec where we’re fortunate to have a subsidized program. But if you have two or more children, hiring a nanny can be less expensive than putting them in daycare.
In today’s post, we’ll take a look at the pros and cons of hiring a nanny.
What you should consider before hiring a nanny
Hiring a nanny is a big responsibility. You’re looking for someone who will be in your home helping you with your children, someone who will become close to or part of your family, so you want to do it right. Not only for you and your kids but for your nanny as well.
Before we get into the financial aspects, let’s talk about how to find a nanny. My clients with nannies say the best way to find one is to hire by word of mouth, rather than through an agency. That direct communication means a closer relationship to the nanny and a better understanding of their workload, as you know the agency isn’t asking them to do any extra work on the side. You should always check references too.
Once you’ve found a nanny you like, draft a clear job description and fully outline your expectations. How many hours will they be working? How often will they be expected to work overtime? Will they just be looking after your children or will there be additional household chores like cooking and cleaning? Will they be expected to travel with you when your family goes on vacation? What days will they need off outside of statutory holidays? These are all good conversations to have up front because clarity will make the relationship smoother and stronger.
Now, if you’re hiring a nanny, you have to do everything above board. Don’t pay under the table.
Not only will that leave you open to potential back taxes and penalties, your nanny is also more likely to simply move on to the highest bidder at a moment’s notice. It means a less engaged employee who is less loyal. Building employment insurance and Quebec Pension Plan benefits increases engagement and reduces turnover, which is disruptive and time consuming for everyone.
So what do you need to do as an employer? First, decide on a fair and equitable salary. The current minimum wage in Quebec is $11.25 per hour or $24,000 per year, but this is just a starting point. In discussions with friends and clients around Montreal, $15 to $20/hr seems to be the going rate. A nanny’s salary is negotiable depending on the going rate in your neighbourhood, their qualifications and years of experience, and how many children they’ll be looking after. A good nanny can be hard to find so make sure what you’re offering is competitive and fair.
You are also responsible for source deductions like QPP, EI, the Quebec Parental Insurance Plan or QPIP, and the Quebec Health Services Fund.
Your nanny is entitled to two weeks of vacation, which becomes three weeks after five years of service. Assuming minimum wage, 4% vacation pay must be paid before vacation is taken and that goes up to 6% after 5 years. Or you can simply keep paying them their normal wage through their vacation weeks. They also must get all 8 of the statutory holidays, and you have to decide between Good Friday or Easter Monday.
Consider offering unofficial days off as well, like early departures on summer Fridays or during your family vacation. When it comes to overtime, which is anything over 40 hours a week, you must pay 1.5 times their hourly rate or offer vacation in lieu at the same multiple.
I’ll stop here for now. In my next post where I’ll walk you through what you can and can’t deduct on your tax return and what needs to be reported to the government.