Childminding and Tax
If you mind 4 or more children at any one time, or if you earn over €15,000 per year gross, you must register with Revenue, make an annual tax return and pay taxes in the same way as any other self-employed person.
Tax due is calculated on the profit of the Childminding business, not the income. Childminders making a return under the self-assessment system must keep receipts of expenditure involved in running the Childminding business. (Please note receipts must be kept for 6 years.) Such expenses are deducted from the fees paid by parents to determine your income. An up to date tax calculator is available online to members of Childminding Ireland.
Self-employed contributors with annual self-employed income over €5,000 pay Class S PRSI at the rate of 4%, subject to a minimum payment of €500. This refers to PRSI for the Self-Employed. You should only register for Value Added Tax (VAT) if your annual turnover exceeds or is likely to exceed €37,500 for the supply of services.
However, once you are registered with Revenue, you may be eligible to claim the Childcare Services Tax Relief (see below).
Childcare Services Tax Relief
The implications of tax or Universal Social Charge (USC).
In order to claim the Childcare Tax Relief you must be registered with Revenue as self employed. Anyone caring for fewer than 3 children in the home may do this.
You pay no tax or Universal Social Charge (USC) if:
- You earn no more than €15,000 per year gross from Childminding; no deductions are allowed,
- You mind no more than 3 children (0-17) at any one time on your own,
- Your service is known to your local Childcare Committee,
- The exemption must be claimed in an annual tax return.
Even if you are a part-time PAYE worker elsewhere (in Tesco’s or at the hairdressers), you can still claim this tax relief for your Childminding work.
You will make a Class S PRSI contribution of €500 per annum when making your tax return. This Class S PRSI covers maternity leave and old age pension only.