Mileage Reimbursements for Nannies and Domestic Workers
*We do not give official legal and accounting advice and this information has the potential to become outdated. Please consult a legal, payroll, or tax professional before making final compensation or legal decisions for your Family, Nanny, or Domestic Worker. *
Do I need to pay my Nanny or Domestic Worker mileage for driving on the job?
This is a question we get a lot, and something we go over on our initial call with clients, when going over standard nanny benefits. For our agency, paying mileage reimbursements to nannies and domestic workers is a requirement for all of our clients to offer. Paying mileage reimbursements according to the IRS is optional. However, in the nanny and domestic industry it is very standard to pay mileage reimbursements to nannies and domestic workers who use their own vehicles. Any nannies and domestic workers placed by Charlotte’s Best Nanny Agency should be reimbursed for miles driven on the job, not to and from work. There should be no question on this as it should be agreed upon in the Family-Nanny Agreement prior to the first day of work.
Mileage reimbursements should be handled one of three ways when the nanny or domestic worker is using their own vehicle on the job:
- Mileage Reimbursement at the annual IRS rate per mile:
Through this method the nanny or domestic worker would keep a log of miles driven on the job and submit them at an agreed upon interval to the family for reimbursement. The family would then pay the mileage reimbursement directly to the nanny or domestic worker per the annual IRS reimbursement rate.
Beginning on January 1, 2020, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 57.5 cents per mile driven for business use, down one half of a cent from the rate for 2019,
- 17 cents per mile driven for medical or moving purposes, down three cents from the rate for 2019, and
- 14 cents per mile driven in service of charitable organizations.
The business mileage rate decreased one half of a cent for business travel driven and three cents for medical and certain moving expense from the rates for 2019. The charitable rate is set by statute and remains unchanged.
(https://www.irs.gov/newsroom/irs-issues-standard-mileage-rates-for-2020)
- Mileage Stipend: Family would come up with a weekly, bi-weekly, or monthly mileage stipend to pay the nanny to compensate for the use of the nanny or domestic workers vehicle on the job and pay the stipend out accordingly.
- Expense Card Authorization from the family (agreed to in writing in the family-nanny agreement): The family would authorize the nanny or domestic worker to charge the nanny or domestic worker’s gas every two weeks to the family’s expense card for reimbursement of using their own car own the job.
Other Considerations
Other things to keep in mind as it comes to mileage and driving costs. If you have an extra vehicle the nanny can drive during work hours, then you of course do not have to pay mileage but would have to pay for gas and maintenance of that vehicle.
In addition to mileage, families should take into consideration what the car seat situation will be and make sure the nanny has access to safely installed car seats for each child that is being transported. This means in some cases that an extra car seat will need to be purchased for the nanny or domestic worker’s vehicle. Families, please have a family representative ensure the car seat is installed properly, the nanny knows how to secure the child safely in the seat, and that your nanny is up to date on all of the latest car seat safety standards.
Also, it is always wise to confirm what auto insurance coverages your nanny or domestic worker carries and to make sure they have enough coverage to cover any incidents that could occur.
If you are hiring outside of a professional agency, please make sure you have done a driving record check on your nanny or domestic worker and ensure they have a valid driver’s license.
