What are the costs of hiring a caregiver privately?

The private-hire hourly rate is not the total cost. It is the wage, and only the wage. Everything that turns a wage into a delivered, insured, supervised shift lives outside that number and lands on the family.

Payroll tax alone runs about 7.65 percent for the employer half of FICA and Medicare, plus another 1–3 percent for federal and Michigan unemployment insurance. On a $22/hr private rate, that is roughly $2/hr before any other cost is counted. Workers compensation insurance is required for household workers meeting certain thresholds in Michigan and costs $500–$1,500 per year on top. General liability coverage for injury to or by the caregiver typically requires a rider on the homeowners policy or a standalone household-employer policy.

Then there is the operational load: recruiting, interviewing, background checks, reference checks, ongoing training on transfers and dementia response, and building a backup arrangement for when the caregiver is sick, on vacation, or quits. Each of those has a real dollar cost and a real time cost.

A Southeast Michigan agency rate ($27–$42/hr depending on care type) folds every one of those items into the number. After the math, the "cheap" private-hire rate is usually within a few dollars of the agency rate — with none of the risk transfer.

For the full breakdown, see the cornerstone: Private Hire vs. Agency guide.