private home care services (and any healthcare services) can get expensive quickly.

There can be sticker shock to find out how much something costs and realize you may need services for longer than you expected.  

We have had situations where people become aggravated spending so much money on a loved one.  One of the issues that come up is that people do not realize all of the costs that are associated with running a home health care business.

So we decided to list the top seven costs associated with private home care, in hopes to educate people that there are a lot of expenses related to this industry.


Cost of the Caregiver

The number one cost to a service based company is their employee’s wages.  These take up the bulk of the cost of the prices a company charges.

Included in the cost of the caregiver are the hiring and training costs.  With an industry average of 50% turn-over (meaning 50% of your caregivers are not with you for over a year), it can become costly hiring and on-boarding new employees.



Insurance is the next most significant cost for s service-based business; Insurance adds up quickly because you need two types of insurance.

You need worker’s compensation, so if a worker gets injured on the job, they can be reimbursed for time lost from work.  This insurance is also essential when presenting to potential clients, so they know they are not liable if someone gets injured in their home while providing care.

The next type is liability insurance.   If the caregiver does something negligent, steals, or commits some other crime, we have the insurance to cover the damages done.

Worker’s compensation insurance is usually more money as it is more common for a caregiver to get injured on the job than anything else.

Statutory Benefits

These are benefits that are mandated by the state.    All employers must pay payroll tax, social security, and unemployment insurance among others, but different depending on the state you may be required to pay more.

Recently, a law was passed for paid family medical leave.  Additionally, we have MassHealth in this state and employers need to pay in for that as well.  As there are more mandatory benefits that employers pay for, that generally means you can expect rates to increase for these services.


Training and supervision is another cost that is associated and built into the rate of care.    We have talked about the importance of field supervision in other posts, but when you have someone whose full-time job is to train and supervise the field staff, it does additional costs to this business.

We train our staff on site when needed and then do unannounced visits on staff as well.  We are looking to make sure they are keeping up with their tasks, are showing up on time, doing their job, and making sure that they and the client are happy with the arrangements made.

Office Staff

The office staff is a crucial part of this business.  These are the people who are putting the puzzle pieces together to find the right caregivers, who have the available schedule to fit the proper cases and clients.

Their job does not traditionally bring money into the business as a salesperson would, but they are a huge reason why a company will continue to get more referrals, or if clients will leave the company.  So when you think about a home care company, know that the office staff is a significant part of the cost of doing business.

Health Insurance

We mentioned MassHealth earlier as a statutory benefit, but health insurance should have its category.  Regardless is it is mandated or not, providing health insurance to employees is a considerable expense.  It is one of the most prominent political topics these days and the cost of healthcare continues to rise, which means so does the price to buy health insurance.

Overtime/Unexpected Costs

Everyone in this industry knows that overtime and unexpected costs are part of the job.  Eventually, there is a last minute call out, and you need to have a caregiver cover the case that will go into overtime.

The general rule of thumb is that if it is the company’s fault (call outs, broken down cars, no call no shows), then we eat the cost of paying the caregiver more, while things we can’t control, like weather, are passed onto the customer.

The majority of overtime and unexpected costs are absorbed by the company.  We know when the weather is going to be poor and work with our customer to try and avoid it as much as possible, but we can’t say for sure when someone is going to miss a shift because their car would not start.

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