Childminding and Tax
If you are running a business, however small, you must register with Revenue, make an annual tax return and pay taxes in the same way as any other self-employed person.
However, once you are registered with Revenue, you may be eligible to claim the Childcare Services Relief.
You only pay taxes on the net income of the Childminding business, after deducting costs incurred, not the gross income. Childminders making a return under the self-assessment system must keep receipts of expenditure involved in running your Childminding business. Such expenses are deducted from the fees paid by parents to determine your taxable income. An up to date tax calculator is available to members of Childminding Ireland – please note this is a guide only.
Self-employed persons 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 register for Value Added Tax (VAT) if your annual turnover exceeds or is likely to exceed €37,500 for the supply of services.
Childcare Services Relief
In order to claim the Childcare Services Relief you must be registered with Revenue as self-employed. Anyone caring for fewer than 3 children in the home may do this.
This relief exempts you from income tax if:
· Gross fees are less than €15,000 per year from your Childminding services.
· 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 work part-time elsewhere, you can still claim this tax relief for your Childminding work.
You will still pay the Class S PRSI contribution of 4% of your taxable income as a minimum per annum. For more information on this see PRSI for the self-employed.
You are also exempt from the USC if your net income (gross fees less costs), is less than €13,000.