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Your nanny has been doing a fantastic job – your kids adore them, the household runs smoothly, and you can’t imagine life without their help. As time goes on, it’s important to reward your nanny’s hard work and loyalty, not only with words and appreciation (as discussed in our previous post) but also financially. Knowing when and how to give your nanny a raise is a key part of being a fair employer and maintaining a positive long-term relationship. This is especially pertinent in areas like Los Angeles, where the cost of living is high and competitive wages are needed to retain top talent.
Let’s break down the typical timelines for raises, how much is appropriate, and the best way to approach the conversation.
1. Anniversaries / Annual Raises: The most common timing is on the nanny’s work anniversary or the end of each year. Many families evaluate pay annually, much like in corporate jobs. If your nanny has been with you a year (or even 6 months for a first review), that’s a natural point to give a raise. In fact, a survey by Park Slope Parents found employers typically give yearly raises, often around $1-2 per hour each year. Offering a regular annual raise shows the nanny that you acknowledge rising costs and value their growing experience with your family.
2. Increased Responsibilities: If your family’s needs have changed such that the nanny is doing more than initially agreed, it’s time to adjust pay accordingly. A common example is the birth of a new baby. If your nanny was originally caring for one child and now there are two, that’s a significant increase in workload. Typically, caring for an additional child might warrant a raise of somewhere in the 10-20% range or a set dollar amount more per hour. Another example: your child starts school and you ask the nanny to take on house management tasks during school hours – that’s essentially a role expansion and should come with a raise or stipend for those duties. Westside Nannies, a LA agency, notes that for significant changes in job description (like a new baby or lots of new duties), families often give a raise of 10% to even 20-25% depending on how much the role has expanded.
3. Performance and Retention: If your nanny is truly outstanding – going above and beyond consistently – you might give a merit-based raise outside of the normal schedule. Perhaps after 2 years of stellar performance, you decide to bump up pay as a thank-you and to ensure you continue to retain them. If you’ve heard that the market rates have gone up (for instance, new nannies in your area are commanding higher pay than what you currently provide), you might proactively raise your nanny’s pay to keep it competitive. In Los Angeles, nanny pay can increase quickly due to demand; you don’t want your rockstar nanny being lured away by a higher offer. Staying in tune with market rates (via networks or something like the annual INA nanny salary survey) helps you decide if an out-of-cycle raise is wise.
4. Cost of Living/Inflation Adjustments: Inflation affects everyone. Some families choose to give a small cost-of-living raise each year (COLA), often a few percentage points, to keep the nanny’s salary from stagnating in real terms. In high inflation periods or after multiple years, this might be warranted in addition to any merit increase. For example, if the Consumer Price Index shows a 3% rise, you might ensure at least a 3% pay bump so the nanny isn’t effectively earning less than before. Westside Nannies mentions that a COLA (like currently ~1-3%) maintains salary value, while a true raise is usually on top of that.
5. Retention Milestones: Some families plan raises at certain milestones – say, at 3 years or 5 years of service, they give a more significant raise or bonus as a loyalty reward. If you’ve had a nanny stay that long, that itself indicates a great relationship, and a reward is usually due.
In summary, at least once a year you should review your nanny’s compensation to see if a raise is appropriate. If the nanny’s role remains identical and their performance is solid, an annual raise is still highly recommended (even if modest), simply for retention and goodwill. If duties increased or performance is exceptional, consider a larger or earlier raise.
Raise amounts can vary, but here are some guidelines:
Annual Standard Raise: A common range is 3-5% of their current pay, akin to what many industries do for cost-of-living and standard performance. If your nanny makes $25/hour, a 4% raise is $1 extra (making it $26/hour). Many families will just do a round number like +$1 or +$2 per hour each year. Park Slope Parents data showed average was about $1.20/hr per year in NYC; LA might be similar or slightly higher. In percentage, if they made $25, going to $26 is a 4% raise.
Merit/Performance Raise: If you feel 3-5% is too small to truly reward their outstanding work, you could go higher, e.g., 5-10%. For example, you could bump $25 to $28 (that’s a 12% increase). Some families give a larger jump at the end of the first year especially if starting pay was conservative. Keep in mind your budget, but also the cost of potentially losing and replacing a great nanny (financially and emotionally) is much higher.
Role-change Raise: As mentioned, adding a second child or substantial duties might warrant 10-20% or more. Westside Nannies mentioned 10-25% for significant changes. For instance, caring for a newborn in addition to an older child might bump a $25/hr nanny to $30/hr (a 20% increase). If you can’t swing that much hourly, you might find other ways like a weekly stipend for the new baby (some families might say, okay, $25/hr plus $100 extra per week for the new baby – which roughly equates to a couple bucks more per hour).
Longevity/Loyalty Increase: After many years, a nanny’s pay may go up quite a bit from where it started. It’s not unheard of for a nanny in LA who started at $20/hr to be making $30/hr after 5-6 years with raises and added duties, etc. The exact numbers will vary, but be prepared for gradual increase over time. It’s wise to plan for these in your budget from the get-go.
Also factor in current market rates. If you hired your nanny at a time when her rate was, say, slightly below the area average (maybe she was newer or you lucked out), after a couple years, the average may have risen or she now has more experience. Adjusting her wage to keep it in line with what someone of her tenure deserves is fair. You wouldn’t want her to feel underpaid compared to peers. According to a 2025 Care.com report, the average nanny rate in LA was about $25.73/hr. If your nanny is still making $22 after two years, that’s below current average – probably time to bump it up generously if you can.
Bonuses vs Raises: Some families consider a year-end bonus in lieu of or in addition to a raise. A bonus is a one-time reward (common is one or two weeks’ pay as a holiday bonus). A raise permanently increases earnings. Ideally, do both: a small raise and a bonus. But if you must choose, a raise is often more appreciated long-term as it boosts income continuously (and compounds for future raises). You could, for example, give a 3% raise and also a bonus if the year was especially great or if inflation was high but you can’t commit to a huge raise.
Talking about money can be awkward, but it doesn’t have to be. Here are some tips to make the “raise talk” smooth and positive:
Plan a Meeting: Let your nanny know you’d like to have a sit-down chat to review things. She might even suspect (or hope) it’s about a raise if it’s anniversary time. Choose a time when kids aren’t around or are sleeping, so you can focus.
Express Appreciation: Start the conversation by acknowledging her hard work and what she means to your family. Be specific: “You’ve been with us for a year now, and we are so grateful for the loving care you provide. Tommy has thrived, and we see your positive influence every day – like how he says ‘please’ and ‘thank you’ because of your gentle reminders.”
State the Raise Clearly: “We’d like to increase your hourly rate from $X to $Y, starting [date].” Or if salary, “increase your weekly salary by $50” or however you structure it. Putting it plainly avoids confusion. It’s good to mention the percentage or rationale: “That’s about a 5% raise, which we feel is well-deserved given how great you’ve been doing.” If tying to new duties: “With the new baby coming, we know your responsibilities will increase, so we want to adjust your pay to $X to reflect that added responsibility.”
Mention Other Comp Changes: If you are adding PTO or other benefits, bring that up too: “Also, you’ll have an extra three paid sick days available this year, since we didn’t use many last year.” Or “We’d like to contribute $100/month toward your health insurance starting now.” These are forms of giving a “raise” in total compensation.
Listen and Watch Reaction: Most nannies will be appreciative and possibly relieved (if they were hoping for it). If the raise is smaller than expected, occasionally a nanny might politely ask if that’s negotiable. If you truly can’t do more, express that it’s what you can manage now but you value her greatly. In many cases, nannies do not directly negotiate for more due to the personal nature of the relationship – but if you fear your offer is low, you probably should have reconsidered before the meeting. Know that good nannies often talk to each other; you don’t want yours feeling underpaid if she compares notes with nanny friends.
Put It in Writing (After): Follow up with a short written note or email for clarity, e.g., “As discussed, effective January 15, your hourly rate increases to $27. Thank you for all you do for our family!” This avoids any later “was it this or that amount/date?” issues. It also formalizes the appreciation.
Handling if Nanny Asks First: Sometimes a nanny might bring up the topic before you do, perhaps at the one-year mark or if she’s feeling she needs a raise due to circumstances. If you get a request and you weren’t planning on it yet, evaluate it seriously, don’t take offense. It often means she loves the job but needs more to make it sustainable for her. If her request is reasonable and within market range, try to meet it or find a compromise (maybe a slightly smaller raise plus a promise to revisit in 6 months). If you truly cannot afford any raise, express understanding but be honest about budget constraints – maybe offer a one-time bonus if you can’t commit to ongoing. However, realize that if a nanny is asking, she likely feels she should earn more; if you can’t eventually meet that, she may start looking for other jobs. Open dialogue is important.
Nanny Share Situations: If you employ a nanny share (one nanny for two families), raises should be coordinated between the families. Maybe you both kick in an extra $1/hr, so her total hourly increases by $2 (if she was, say, at $30/hr split $15/$15, it might go to $32 total, $16 each family). Communicate with the other family early so you’re on the same page.
Transition to Salaried: Some long-term nannies prefer to become salaried (with clear overtime terms) for stability. As kids start school, hours might fluctuate – sometimes a guaranteed weekly salary even if hours go down a bit is a form of giving a raise (more pay for less hours essentially). For example, you keep paying 40 hrs/week even when kid is in school and she’s only doing 35hrs of kid care + maybe 5 of household tasks or off-time.
Documentation: Update any contract or payroll records with the new rate. If you use a payroll service, inform them of the raise effective date.
Taxes: If you pay on the books, remember a higher wage means a bit more in employer taxes too – budget that in.
Regular Review: Make the raise process expected by doing it regularly. That way it’s not awkward – it’s just “that time of year we talk about your achievements and adjust compensation.” Many nannies won’t bring it up themselves, so the onus is on you to remember.
By handling raises thoughtfully, you demonstrate respect for your nanny’s professional growth and acknowledge their increasing value over time. This not only helps retain your nanny, but it boosts morale. A nanny who feels fairly compensated is likely to be more engaged and content in her job, which translates to better care for your kids.
When giving a raise, also use it as an opportunity to celebrate the nanny’s contributions. Some families make a mini event of it – e.g., at the 1-year mark, have the kids make a “Thank You” card or a small gift in addition to the raise. You might say “It’s been a year, we absolutely love you, and we want to thank you. We’re giving you a raise and here’s a little something from the kids too.” This makes the moment special and not just a dollars-and-cents talk.
Remember, a raise is as much about the symbolic gesture as the money. It tells your nanny “You’re worth it.” So even if a raise is modest, framing it in genuine appreciation is vital.
Perhaps you had a financial setback or one parent lost a job, and it’s raise time but you’re really stretched thin. Be transparent with your nanny. Most will understand if you communicate honestly. You could say, “We really want to give you a raise because you deserve it. However, this year has been tough because X. Here’s our plan: we’d like to give a smaller raise now (or a bonus now) and then revisit in six months hoping to do more.” Or even, “We can’t do it right at the year mark, but we are aiming for 3 months from now if circumstances improve.” Then make good on it as soon as you’re able. Leaving a great nanny without any raise indefinitely will breed quiet resentment and risk losing them. Even a symbolic gesture (like more paid time off or a one-time bonus) is better than nothing. Show that you value them and that the issue is your finances, not their performance.
Most nannies in such situations appreciate the honesty and will stick it out if they love the family, trusting that you’ll take care of them when you can. If the financial crunch looks long-term, though, understand if the nanny starts looking for higher-paying work – and don’t begrudge them that.
By properly timing and handling raises, you can ensure your nanny feels rewarded and financially secure, increasing the likelihood they remain with your family for years. Consistency in caregivers is so beneficial for kids – and paying your nanny well is part of that consistency.
In Los Angeles, where a nanny’s living expenses (rent, gas, etc.) rise every year, giving raises isn’t just nice, it’s often necessary for them to continue in the role without financial strain. It’s one of those concrete ways you show “You take care of our family, and we take care of you.”
In conclusion, plan for a raise at least annually, adjust for big changes, be clear and gracious in the discussion, and keep communication open about compensation. By doing so, you uphold your end of the bargain in this important working relationship, ensuring your nanny remains motivated, loyal, and happy to keep caring for your little ones.
References: Compensation best practices for nannies often mirror those in other jobs. Westside Nannies, another top LA agency, suggests a standard 3-10% increase annually depending on performance and cost of living.
