Paying childminder through limited company

Hello,

I'm a contractor with a limited company. Myself and my wife have recently hired a live-out nanny to look after our two small kids - this was an attempt to cut down on creche fees.

The nanny will also do some bookkeeping for the company. I am considering paying her salary through the limited company (salary = €300/week) but wondering what the risks would be.

Any advice?

If she is legitamately working for the company, and officially on the payroll, with all PAYE/USC requirements met, then there should be no issues of concern. I have seen this done egularly in respect of family members. However, a practising accountant would be in a better position to advise on any other issues you would need to cover.

If part of what you are paying her relates to a non-business purpose then you have not got a deduction for that as a wage cost, what you actually have is a BIK for the directors, and additional tax / PRSI on them in that regard.

It also seems a bit legally grey from an employment law and insurance point of view, a company (whose business is not the minding of children) paying someone to mind children, presumably in the home of another employee (the directors)... it could all get messy.

Thanks for your replies. Appreciate your help.