Nanny vs Daycare Calculator

For families in healthcare, childcare is often one of the biggest expenses, and shift work makes the choice harder. A nanny offers flexibility but comes with employer taxes and extras. Daycare is usually cheaper for one child but less flexible. This calculator compares the full yearly cost of each.

What this calculator does

Enter the number of children, daycare cost per child per month and months of care, the nanny's hourly rate, hours per week, paid weeks per year, your share if you split a nanny with another family, state unemployment tax and other nanny costs. It shows:

• the yearly savings with the cheaper option,
• which option is lower cost,
• the nanny's total yearly cost for your share,
• the daycare total per year, and
• your employer taxes on the nanny.

The formula in plain English

Daycare total = monthly cost per child × children × months.

Nanny wages = hourly rate × hours per week × paid weeks × your share.

Employer taxes (if wages reach $3,000 in 2026) = wages × 7.65% Social Security and Medicare + 0.6% federal unemployment on the first $7,000 + state unemployment.

Nanny total = wages + employer taxes + other costs × your share.

A worked example

Dr. and Mr. Lee have two children. Daycare costs $1,600 per child per month, all year. A nanny would cost $24 an hour for 45 hours a week, with 52 paid weeks, about $300 in state unemployment tax and $2,000 a year in extras.

• Daycare: $38,400 a year.
• Nanny wages: $56,160.
• Employer taxes: about $4,640.
• Nanny total: about $62,800.
• Daycare costs about $24,400 less.

But if the Lees shared a nanny with another family at 50%, their cost would drop to about $31,600, about $6,800 less than daycare, while giving them more flexibility for early shifts.

Why it matters at each career stage

If you're: Resident / fellow

Long, unpredictable hours make daycare hours hard to match. A nanny share or a mix of daycare and a part-time sitter can be a middle ground.

If you're: Employed

Use pre-tax dollars where you can: a dependent care FSA covers up to $7,500 in 2026, and the child care credit can cover part of the rest.

Beyond cost

Flexibility. Nannies can match early, late and weekend shifts.

Sick days. Daycare usually won't take sick children; a nanny can often still come.

Socialization. Daycare offers group play and structure.

Backup care. With one nanny, you need a plan for their sick days and vacations.

Number of children. A nanny's cost doesn't rise much with a second or third child, while daycare costs do.

Mixing options

Many healthcare families combine care: daycare during regular hours plus a part-time sitter for early mornings, evenings or weekend shifts. Others use a nanny for younger children and switch to daycare or preschool as children get older. Try running the calculator with fewer nanny hours, or a smaller share, to see what a mixed plan would cost.

Paying a nanny legally

Paying "on the books" protects you and your nanny. It lets you use the dependent care FSA and credit, gives your nanny Social Security credits and unemployment protection, and avoids penalties. A household payroll service can handle withholding, filings and W-2s for a modest fee.

Next, plan full childcare costs, estimate your child tax credit and see what going part-time would cost.