How Much Care Costs: Agency vs. Private Caregivers

Posted in Articles, How Much Care Costs on December 10th, 2009 | Comments Off

The cost of care varies depending on whether you choose a private caregiver or an agency caregiver. The cost of an agency caregiver ranges from $11 to $30 per hour, while the cost of a private caregiver ranges from $8 to $20 per hour. You will be paying more for an agency caregiver, but you will be spending more time hiring a private caregiver.

When hiring an agency caregiver, the agency bears responsibility for recruiting, screening, background checks, reference checks, credential checks, hiring, firing, salary negotiation, and day-to-day management of the caregiver. When it comes to paying the caregiver, an agency will pay wages, withhold taxes, and file required reports with the state and federal government. Without an agency, these responsibilities fall on you.

If you or your loved one has plenty of time to take care of these responsibilities, a private caregiver may be a perfect choice. If you do not mind spending extra money and wish to avoid time-consuming tasks, an agency caregiver may be a better choice for you. Remember to consider who else is around to assist the patient. If there are family members and friends living nearby to assist with the process of hiring, managing, and paying a caregiver, it will not take as much time hiring a private caregiver. You should make a list of the benefits and drawbacks of each choice and determine which type of caregiver works best with your time schedule and financial situation.

When determining how much it will cost to hire a private or an agency caregiver, you must consider two factors:

1) Time
2) Money


If you work a full time job or have little time to look for an appropriate caregiver, hiring an agency may be the best choice for you or your loved one. An agency will do most of the time-consuming tasks that would otherwise be your responsibility when hiring a private caregiver. It may take a few hours to find a perfect agency, but once you do they will take care of most of these tasks for you. You will need to periodically check-in with the agency, but they will take care of the general management of the caregiver.

Agencies provide a variety of caregivers, so you or your loved one may be able to try out many caregivers to find the perfect fit. Agencies manage the selection of caregivers for you, so finding a perfect caregiver will take less time. Without an agency, you may spend more time trying to find an appropriate caregiver. If a caregiver is unable to show up for their shift, an agency will provide an additional caregiver. Without an agency, it will take much more time and effort to find a replacement. If the patient has family members or friends living close by, finding additional caregivers will not be as time-consuming.

Hiring a private caregiver will take much more of your time. If you have the time to hire a private caregiver and if you are willing to take on more responsibilities, hiring a private caregiver may be the best choice for you or your loved one. It will take you approximately:

• 1 hour to place advertisements for a caregiver
• 2 hours to call potential caregivers
• 30 minutes for each caregiver you interview
• 45 minutes to check a potential caregiver’s references
• 2-3 hours a week to provide ongoing management and bookkeeping for your caregiver.

Overall, it will take you approximately 20 hours to find a suitable caregiver and 2-3 hours per week to manage and pay them. If you or your loved one is unable to provide ongoing management for a caregiver, it is a better choice to hire an agency. If a patient does not have family members or friends living nearby to assist with daily management, a private caregiver will not work.


It will cost approximately $11-$30 per hour for an agency caregiver. With every dollar you spend with an agency, 55% of it goes to the caregiver. Where a private caregiver charges $10.00 per hour, it will cost $18.00 per hour for an agency caregiver at the same skill level. The cost is more expensive for an agency caregiver because the agency will take care or hiring, managing, and paying the caregiver.

Hiring a private caregiver is less expensive, but you will be spending more of your own time managing and paying them. It is less expensive to hire a private caregiver because you only pay an hourly rate, as opposed to both an hourly rate and an hourly premium for an agency caregiver. You will need to use your own money and assets to pay for a private caregiver and 10% of a private caregiver’s salary must go to payroll taxes. It will cost approximately:

• $25-$50 to place an advertisement to find a caregiver.
• $50-$200 to perform background checks on potential caregivers. A legitimate background check can range anywhere from $15-$50 each
• $200-$300 per year for insurance coverage in your home to cover any future accidents or injuries during the caregivers shift.

Private caregivers are often less expensive than agency caregivers, but they seldom accept insurance as a form of payment. Most agencies accept many forms of insurance for payment. If you wish to make payments with private insurance, Medicare, Medicaid, or Long Term Care Insurance (LTC) you must use an agency that accepts these types of insurance.

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