When you and your nanny settle on '$25 an hour,' you need to be sure you both mean the same thing. There are two very different numbers hiding in that sentence — gross pay and net pay — and picking the wrong one to negotiate around can quietly cost you thousands.

The two numbers

  • Gross pay is the wage before taxes come out — the true cost of the labor, and the number that goes on the W-2.
  • Net pay (take-home) is what actually lands in your nanny's account after Social Security, Medicare, and income tax are withheld.
Payroll math always runs from gross down to net: start with gross, subtract each tax, and what's left is net. Agree on gross and everything downstream is defined.

The 'net pay trap'

Here's what goes wrong. A family agrees to pay their nanny '$800 a week, take-home.' That commits them to a fixed net number — which means the family absorbs all the taxes on top. To deliver $800 net, the gross wage has to be grossed up to whatever amount nets $800 after withholding. And it gets worse: because the employer covering the employee's taxes is itself treated as extra wages, the gross climbs even higher.

With a net-pay deal, if withholding changes — a new W-4, a tax-law tweak, a state move — your cost changes too, automatically. You've signed up for a moving target.

Why gross is better for everyone

  • Predictable cost. You know your exact outlay: gross wages plus your employer taxes (roughly 10% on top of gross).
  • Honest W-2. The wage on the tax forms matches what you agreed to.
  • Clear raises. A bump to the gross rate is transparent for both of you.
  • No surprises. Changes in a nanny's personal tax situation don't change your bill.

How to talk about it

Nannies often think in take-home because that's what hits their account — so meet in the middle. Agree on a gross rate, then show them the estimated net on a sample pay stub so they can see their real take-home. That way you're both looking at the same complete picture.

House shows gross, every tax, and net side by side on a pay-stub preview — so you can agree on gross and still show your nanny their take-home.

Preview a pay stub

The bottom line

Always negotiate the gross wage, then show the net. It keeps your costs predictable, your W-2 honest, and your nanny fully informed about their take-home pay.