Nanny Year-End Bonus: What's Standard and What It Costs

What families actually give

This is a November and December question. Most families think about it once, in the last few weeks of the year, decide in a hurry, and never revisit it. So it is worth knowing what the surveyed norm is before you pick a number.

The modal answer, across every source we could find, is one week's pay. GTM Payroll Services, writing up the International Nanny Association's 2022 Salary and Benefits Survey, reported that nearly three in four nannies receive a year-end bonus, with an average of about $1,951. The Berkeley Parents Network's 2018 nanny survey found 76% of responding families gave one, most commonly one week's pay. Park Slope Parents, surveying Brooklyn families for its 2024 holiday tips report, found an average nanny bonus of roughly $1,145, and among families who set the bonus as a multiple of weekly pay, 78% gave one week, 18% gave two and 4% gave three.

Treat all three as directional rather than authoritative. They are self-selected reader surveys of small, unrepresentative populations, and the INA figure is now several years old. What they agree on is the shape of the answer: a large majority of families give something, and the default unit is a week of pay rather than a round dollar amount.

Note that the two averages point in opposite directions from what you might expect. The Brooklyn average is lower than the national INA average, even though Brooklyn weekly pay is higher. That is mostly a composition effect: neighbourhood surveys sweep in part-time nannies, sitters and shared arrangements, which drag the flat average down. It is a good reminder that a raw average bonus figure is close to meaningless on its own. The multiple of weekly pay is the number that transfers between families.

Tenure, hours and metro

Three things reasonably move the number off the one-week default.

Tenure. A nanny who started in September has not worked a year, and prorating is the normal and accepted response. Four months of a twelve-month year is a third of a week's pay. Nobody is offended by a prorated first-year bonus as long as you say that is what it is. In the other direction, families often move to two weeks somewhere around year four or five, and use the bonus rather than the hourly rate to recognise long service.

Part-time. Prorate on hours, not on the calendar. A nanny who works three days a week gets one of her weeks, which is three days of pay, not five. This is the single most common point of confusion in part-time arrangements, and it resolves cleanly once you state the rule as "one week of your normal schedule". If she also works for another family, your bonus is independent of theirs.

Metro. High-cost metros do produce larger dollar bonuses, but almost entirely because a week's pay is larger there, not because the custom is more generous. New York, Boston, the Bay Area and DC all sit on the same one-week convention. If you want to know what your metro's bonus looks like in dollars, start from local weekly pay rather than from a national average bonus figure. Our state-by-state nanny rate breakdown is a reasonable starting point for that.

A fourth factor, worth naming because it causes friction: whether the bonus is also the annual raise. Park Slope Parents found that for 81% of families the holiday bonus doubles as the yearly bonus. It should not double as the raise. A bonus is a one-time payment; a raise changes the rate going forward. Conflating them is how a nanny ends up on the same hourly rate for four years.

The gross-up table

Once you accept the bonus is wages, a practical question follows: if you want your nanny to actually receive $1,000, what do you have to run through payroll? The answer is not $1,000. It is a "gross-up", and the arithmetic is worth seeing rather than trusting.

Stated assumptions. The employee share of FICA is 7.65% (6.2% Social Security up to the wage base, which is $184,500 for 2026, plus 1.45% Medicare with no cap). For federal income tax we assume the optional flat rate for supplemental wages, which the IRS has held at 22% for 2026 on supplemental wages under $1 million. That totals 29.65% of employee-side withholding, so the gross is the net divided by 0.7035. The right-hand columns add a flat 5% state income tax withholding as an illustration of a typical state; substitute your own, or ignore those columns entirely if you are in a state with no income tax.

These are assumptions, not your nanny's actual withholding. Her real federal withholding depends on her Form W-4, on whether your provider uses the flat supplemental method or the aggregate method, and on her year-to-date earnings. If she has already crossed the Social Security wage base, the 6.2% drops out and the gross-up shrinks. Treat the table as the right order of magnitude and have your payroll provider compute the exact figure.

Worked illustration, not a quote. Figures assume 7.65% employee FICA and 22% federal supplemental withholding, rounded to the nearest dollar. Your nanny's actual withholding depends on her W-4 and your state.

Read the $1,000 row slowly, because it is the one that surprises people. To put $1,000 in your nanny's hands you run roughly $1,421 through payroll, and your total outlay is about $1,530 once your own 7.65% employer FICA is added on top of the grossed-up wage. In a 5% income tax state, the same $1,000 costs you about $1,647. The gap between the number you had in your head and the number that leaves your account is over 50%.

The $1,200 row is there because it is close to one week's take-home for a nanny at $30 an hour working forty hours. If that is your situation and you want her to receive a clean week of pay after tax, budget somewhere near $1,850 to $2,000 all in.

Gross-up or just pay a gross bonus?

Grossing up is a choice, not a requirement. The alternative, and the more common practice, is to declare a gross bonus of one week's pay and let the normal withholding come out of it. That is entirely legitimate. It is also what your nanny probably expects, because it mirrors how her regular paycheck works.

The table below shows what a straight gross bonus actually delivers under the same assumptions. The thing to notice is that a "one week's pay" bonus does not give her a week's pay. It gives her about 70% of one.

Worked illustration under the same stated assumptions: 29.65% employee-side withholding, 7.65% employer FICA, no state income tax. Rounded to the nearest dollar.

Which to choose is a budgeting decision, and both are defensible. Grossing up costs you roughly 42% more than the same headline number paid gross, and it is the honest choice if you promised "a week's pay" and meant it as something she receives. Paying gross is cheaper and simpler, and some of the withheld federal income tax may come back to her at filing time anyway if the 22% flat rate overshoots her actual bracket, which for many nannies it does.

What matters more than the choice is saying which one you made. "A $1,500 bonus" means two different things to the two of you unless you specify gross or net. Say it in writing, in the same place you record the rest of her compensation.

Put the bonus on the last regular payroll of the calendar year, or on a separate run before December 31. Wages are reported in the year they are paid, so a bonus paid on December 29 belongs on this year's W-2 and a bonus paid on January 3 belongs on next year's. If you want the deduction or the dependent care substantiation to fall in the current year, do not let it slip.

Two practical consequences. First, a large December bonus can push a nanny's total wages over a threshold she was not expecting, which occasionally changes her own filing position. Warn her rather than surprising her. Second, if you give her a physical envelope on her last day before the holidays and then run the bonus through payroll afterwards, be explicit that the envelope is the net and payroll is catching up, otherwise she will reasonably think she was paid twice and then shorted.

If you use a payroll service, tell them it is a bonus rather than entering it as extra regular hours. The classification determines whether the flat supplemental rate or the aggregate method is used, and entering it as hours can distort her withholding for the whole final period.

Non-cash gifts that can genuinely be de minimis

Given the rules above, there is a narrow band of things you can give alongside the bonus without payroll involvement:

• A modest physical holiday present. Publication 15-B's own examples run to a holiday turkey or ham and low-value birthday or holiday gifts.
• Flowers, fruit or a similar item given under special circumstances such as illness or a family crisis.
• Something the children made. No tax dimension at all, and consistently the part nannies mention years later.

What does not qualify, whatever the amount: cash, gift cards, prepaid cards, store credit, and anything else convertible to cash. Also note that de minimis status depends on the benefit being occasional and small. Giving a $75 present every month is not twelve de minimis gifts; it is a pattern, and the frequency is part of the test.

The sensible structure is a properly processed cash bonus for the money, plus a small non-cash gift for the gesture. If you are reviewing the whole compensation package at the same time, which December is a natural moment for, our guide to what nanny benefits actually cost covers the pieces that sit alongside the hourly rate.