The Year-End Nanny Review: Handling Raises

Most nannies who leave a family they liked do not leave over a blow-up. They leave in February, politely, for a family offering three dollars more an hour, after two years in which nobody ever sat down and talked with them about money.

The end of the year is when that conversation is natural, and most households skip it — partly because nobody taught them that employing someone in your home comes with the same obligations as employing anyone anywhere, and partly because a December bonus feels like it covers the ground. It does not. A bonus is a thank-you for the year behind you. A raise is a statement about the year ahead, and your nanny can tell the difference.

Why the review matters more than the bonus

Run the arithmetic from the family’s side, because it is genuinely one-sided.

A dollar an hour on a 45-hour week is roughly $2,340 over a year. Replacing a nanny costs several weeks of searching, a handover that may not happen at all if she leaves on two weeks’ notice, and a period where your children adjust to a stranger. Families who have been through an unplanned replacement rarely need persuading on this point.

The raise is almost always the cheaper option. It is also the one that is invisible when it works, which is why it gets skipped.

How to actually do it

Book it as its own conversation

Twenty minutes, scheduled, not in the doorway at pickup. Tell her in advance what it is: a year-end review and a pay conversation. A nanny told “can we talk later” with no context spends the afternoon assuming she is being let go.

Start with the work, not the number

Ask her first. What went well this year, what is harder than it was, what she wants more or less of, where she thinks the children are. You will learn things you did not know — that the school run has quietly absorbed an extra forty minutes a day, that she is doing laundry that was never in the agreement, that she would like to take a course.

Then say what you have seen, specifically. “You were the reason the transition to the new school went smoothly” lands; “we’re so happy with you” does not.

Then the number, with a reason attached

Bring a figure, not a question. “What were you hoping for?” puts the burden on her and usually produces either an undershoot she resents later or an ask you have to refuse.

Check the market first so the figure is defensible. Our city guides carry current hourly ranges — Atlanta, Charlotte, Charleston, Miami, Dallas, Houston and Austin. If she is at the bottom of her market’s range after three years with you, that is the thing to fix, and fixing it is cheaper than discovering it from her resignation.

Two anchors worth considering: whether the role has actually grown — a baby who became a toddler who now has a sibling is a different job — and whether her real buying power has held. A rate that has not moved in two years has quietly gone backwards.

Write the outcome down

New rate, effective date, and anything else that changed: hours, duties, holidays, guaranteed hours. Update the work agreement rather than leaving it in a text thread. If you are in North Carolina, bear in mind the state treats a promised wage benefit as an enforceable obligation once you have established it, and any reduction has to be announced going forward rather than applied after the fact — another reason the written version matters.

If a raise genuinely is not possible this year

Sometimes it is not, and saying so honestly beats a vague “let’s revisit in the spring” that she will read as a no. If that is the position, say it plainly, give a date when you will look again, and put something real on the table in the meantime:

More paid time off. Two extra paid days costs a fraction of a raise and is valued out of proportion to its cost.
Mileage, at the current IRS rate, if she drives her own car for your children. Many families are quietly not paying this and should be.
Professional development — a CPR recertification, a sleep-training or newborn-care course, a conference. It makes her better at the job and signals that you see it as a career.
A clearer schedule. Firm end times and reliable guaranteed hours are worth real money to someone whose evenings keep getting eaten.
A phone or petrol allowance, if she is using her own for your household.

What does not work is substituting a bonus for the raise and hoping it reads the same. It does not.

Signs she is already looking

Not accusations, just patterns we hear about from the nanny side of our desk constantly:

She stops offering to stay late, having previously offered without being asked
She asks for her hours in writing, or starts tracking them carefully herself
She takes a day off at short notice, more than once, without much explanation
She stops talking about next summer, or the next school year, in the way she used to
She asks whether you would be a reference

Any one means nothing. Three together usually means the conversation is already overdue, and the window to have it is narrower than you would like.

While you are reviewing: check the things that drift

A year-end review is the natural moment to catch the three things that quietly go out of date in almost every household:

Overtime. If she is live-out and regularly working past 40 hours, those hours are owed at time and a half, and an agreement to the contrary does not change it. Families who moved to a flat weekly rate at some point often drift out of compliance without noticing.
The written agreement versus the actual job. Duties accumulate. If the agreement says childcare and she now does the family grocery shop, the school run and the laundry, the agreement is describing a job nobody has.
Payroll. The 2026 Social Security and Medicare threshold for household employees is $3,000 in cash wages to one employee in the calendar year, up from $2,800 for 2025, and a raise or a bonus changes the numbers your provider is working from. Worth a call rather than an assumption.

And if it is time to make a change

Occasionally the review clarifies that the fit is wrong — the role outgrew the person, or the other way round. That is worth knowing in December rather than discovering in March.

If you reach that conclusion, handle it properly: notice, a written reference if you can give one honestly, and severance if the agreement provides for it. Then start the next search with a clear description of the job as it actually is now, which is the single thing that most determines whether the next placement lasts. How our search works covers what that process looks like, and every placement we make carries a six-month guarantee — if it does not work out in that window, we find you a replacement.

Year-end nanny reviews and raises: common questions

Both do different jobs. A bonus thanks her for the year behind you; a raise is a statement about the year ahead, and a nanny can tell the difference. One to two weeks of salary is the customary bonus range among the families we work with, but a bonus does not substitute for an overdue rate increase — if she has not had one in two years, a December bonus will read as a generous gift from an employer who is underpaying her.

Check your market before deciding a figure, since the defensible answer depends on where her current rate sits in the local range and whether the job has grown. A baby who became a toddler with a new sibling is a different role than the one she was hired for. Our city salary guides carry current hourly ranges for each of our markets.

Say so plainly and give a date when you will look again — a vague “let us revisit in the spring” reads as a no. Then put something real on the table: extra paid days off, mileage at the current IRS rate if she drives her own car, a paid certification or course, or a firmer schedule with reliable guaranteed hours. Those cost a fraction of a raise and are valued out of proportion to their cost.

Late in the year, as its own scheduled twenty-minute conversation rather than a doorway chat at pickup. Tell her in advance what it is about — a nanny asked “can we talk later” with no context will spend the afternoon assuming the worst.

Patterns rather than single events: she stops offering to stay late when she used to, starts tracking her own hours carefully or asks for them in writing, takes short-notice days off more than once, stops talking about next summer or the next school year, or asks whether you would act as a reference. Any one means little. Three together usually means the conversation is already overdue.

Three things drift in almost every household. Whether overtime is being paid correctly — hours past 40 in a workweek are owed at one and a half times the regular rate for a live-out nanny, regardless of any agreement to the contrary. Whether the written agreement still describes the job she actually does. And whether your payroll provider has current numbers, since the 2026 household threshold is $3,000 in cash wages to one employee, up from $2,800 in 2025.

This article is general information from a staffing agency, not legal, tax or payroll advice. Household employment rules change and your situation may differ — confirm specifics with your payroll provider or an employment attorney before you act. We refer our families to GTM Payroll Services for household payroll and tax questions.

Starting a search in the new year?

January is the busiest hiring month of the year for nanny placements, which means the strongest candidates move quickly. If your year-end review points toward a change, talking to us in December puts you ahead of it. Every placement is fully screened and carries a six-month guarantee.

Start Your Search

Prefer to talk it through? Call 1-844-626-6922.