childminder in employers home - tax due?

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3mum

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I plan to employ a childminder in my home to mind my 3 children. I am willing to pay PRSI etc and to register as an employer and have got the Domestic Employer Scheme info sheet.

But I am unsure how much tax she will need to pay. The threshold of €15k is for a childminder in their own home. Is there is a similar threshold for someone minding children in the employer's home? Also, I know the PRSI payment is once a year at the end of the year but how does the PAYE work? Any help would be appreciated!
 
3mum said:
But I am unsure how much tax she will need to pay. The threshold of €15k is for a childminder in their own home. Is there is a similar threshold for someone minding children in the employer's home?
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I don't think so and assume that www.taxcalc.eu will give a good approximation of the tax and PRSI due.
 
There is no €15K or other exemption where you are employing a domestic employee. The persons PAYE will depend on their tax credits and cut-off point. The PRSI will be per the PRSI rates
 
I employ a childminder in my home. I pay employers PRSI but there is no employee PRSI because her income is below the threshold. Likewise as she is part-time her income from me does not result in any tax liability. The PRSI and PAYE is paid monthly, revenue send a payslip every month. You calculate your liability and send it on. You then file a P35 at the end of the year and send on any balancing amount

If your childminder is full time you may also have to pay PAYE and employee Prsi. It is quite a lot of work to set it up and figure out the amounts, holiday pay, pay for bank holidays is also pretty complicated. You also have to comply with other employment legislation such as the requirement to provide a written statement of terms of employment.

When you are filling in the forms for registration make sure that you make it clear, by covering letter as well as ticking the right boxes that you are registering to employ a domestic employee only otherwise you will get threatening letters from the CSO and one of those awful self-employed tax returns at the end of the year.

They don't make it easy !
 
You will need to run a payroll each week/month and give the childminder a payslip.
These are legal requirements.
You have to pay the net pay weekly/monthly, and also pay over PAYE and PRSI to Revenue as required.

Unless you know how to do this yourself, I would suggest that you get a Tax/Payroll advisor to do this for you.
 
ramble said:
I employ a childminder in my home. I pay employers PRSI but there is no employee PRSI because her income is below the threshold. Likewise as she is part-time her income from me does not result in any tax liability. The PRSI and PAYE is paid monthly, revenue send a payslip every month. You calculate your liability and send it on. You then file a P35 at the end of the year and send on any balancing amount

If your childminder is full time you may also have to pay PAYE and employee Prsi. It is quite a lot of work to set it up and figure out the amounts, holiday pay, pay for bank holidays is also pretty complicated. You also have to comply with other employment legislation such as the requirement to provide a written statement of terms of employment.

When you are filling in the forms for registration make sure that you make it clear, by covering letter as well as ticking the right boxes that you are registering to employ a domestic employee only otherwise you will get threatening letters from the CSO and one of those awful self-employed tax returns at the end of the year.

They don't make it easy !
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We are currently reviewing our child minding needs and are looking at both options, i.e. moving the children to another creche or hiring a childminder directly. Obviously it wont only come down to the financials as each scenario has their pros and cons.

The above highlights there is additional work if employing the childminder directly (especially if they are to be full time). But is this the only option? i.e can one hire the minder as say a self-employed person, though I guess that is moving the tax compliance issues onto them, which perhaps isn't quite fair etc.

I guess what I'm seeking is feedback from others that have considered and proceeded with this option. In the meantime I'll head off an read up the literature on the revenue/welfare websites.

Thanks

S.
 
You will not be able to employ a minder as an independant contractor if she works full time for you, you shoud be able to find something on the revenue website about this but basically it is open to revenue to decide that she is an employee and bill you for tax prsi etc. The minder will get benefits as a result of the prsi, I personally think it would not be fair to employ someone without paying for this.

As regards the work involved, I feel it is worth it as there is so much less stress with someone minding your children at home, no collection, pick up, no issue if they are sick etc. I have never had a problem with reliability although some people see this as a potential problem, if you treat your minder properly they will do their best for you.
 
I do this with my childminder/nanny. It really isn't as complicated as it sounds and I'm not a tax expert but have managed to fill out the necessary forms myself for the last two years.
I pay her salary weekly and I send a cheque off to Revenue once a quarter for my/her tax and prsi liabilities. The forms at the end of the year are a bit of a pain to do but not terribly difficult.
Do some research on the Revenue.ie and social welfare department web-sites and you will find what you need on tax and prsi.
Bear in mind though that you are an offical employer and should have a written contract stating terms and conditions and duties. You have to pay a minimum of four weeks paid holidays (although I have found that my nanny ends up with far more as she also is off when we are off work or away). Try to arrange that your big holidays overlap with hers otherwise you will quickly run out of annual leave yourself.
I agree that it will make your life much easier and your children will also be in their own environment. It can be expensive but then again so are creche fees for more than one child!
Don't be put off by the extra bit of work involved - it is worth it.
 
Another option would be to hire a childminder from a childminding company where the childminders are on the payroll of the company.
 
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