Tax return - Tax treatment of day carers
Childminders are subject to certain regulations regarding their income. Childminders are generally self-employed. Remuneration paid not only by private organisations but also by the public sector (e.g. state, local authority, youth welfare office) for the care of children is included in income subject to income tax. This applies regardless of the number of children cared for.
Whether a tax burden actually arises in individual cases, however, depends on whether the total annual income exceeds the tax-free allowances.
In the following, we would like to explain the most important tax conditions and answer the most frequently asked questions.
What do I need to consider for tax purposes when I start my new job?
As you are taking up freelance work as a day carer, you must notify the tax office in whose district you live within one month. This written notification can be made informally. You must then complete the "Questionnaire for tax registration for sole proprietorships" form and submit it electronically to your local tax office.
You can find the tax registration questionnaire and further information on submission at www.elster.de.
In the questionnaire itself, you must provide information on your personal and business circumstances. The questions concern, among other things, the type of activity carried out and the date on which the business was opened. You will also be asked about your other income and that of your spouse, if applicable. Please complete the questionnaire carefully so that the tax office can draw the appropriate tax conclusions. Based on this information, the tax office will then issue you with a tax number and check, for example, whether and to what extent advance income tax payments need to be made.
Further detailed information on the first contact with the tax office, types of tax and tax returns as well as payment transactions with the tax office can be found in the tax guide for start-ups published by the Hessian Ministry of Finance.
Do I have to register a business and pay business tax?
No. Child day care does not constitute a trade within the meaning of § 6 of the Trade, Commerce and Industry Regulation Act. It is therefore not necessary to register a business. There is also no trade tax to pay because child day care is a freelance activity.
What do I need to consider with regard to VAT?
Services provided by childminders in child day care are exempt from VAT in accordance with Section 4 No. 25 of the German VAT Act if you, as a childminder, have a licence to provide child day care in accordance with Section 43 of Book Eight of the German Social Code (SGB VIII). If you do not have a licence in accordance with Section 43 SGB VIII (because you work in the household of your legal guardian, for example), the turnover is also tax-free if your suitability has been determined by the youth welfare organisation. The exemption also applies if you have a licence in accordance with Section 45 SGB VIII (licence for the operation of a facility in which children or young people are looked after or given accommodation for the whole or part of the day).
What has to be taxed for income tax purposes?
You only have to pay tax on the profit calculated on the basis of a comparison of business assets or as the difference between the operating income received and the operating expenses incurred (surplus income statement). The profit must be stated in your income tax return. You can find details on this in the tax guide for start-ups (points B.2.3.3 and B.2.3.4), which is published by the Hessian Ministry of Finance.
What all counts as business income?
In principle, operating income includes all monies that you as a day carer receive from private sources (e.g. parental contribution) or public sources (e.g. state, local authority, represented by youth welfare organisations, youth welfare office) for your childcare activities. If there is no tax exemption, all operating income is also taxable.
According to these principles, the funds from the promotion of child day care in accordance with § 32a of the Hessian Child and Youth Welfare Code (HKJGB), for example, also represent taxable business income.
In contrast, reimbursements made by the public youth welfare organisation for contributions to accident insurance, reimbursements for appropriate old-age insurance and for appropriate health and long-term care insurance in accordance with Section 23 (2) sentence 1 numbers 3 and 4 SGB VIII are tax-free in accordance with Section 3 no. 9 of the German Income Tax Act (EStG) and therefore do not increase profits.
Does the payment of rent subsidies or the subsidised rental lead to operating income?
The direct rent subsidies that you receive from third parties for renting childcare rooms are taxable business income.
However, if childcare rooms are provided at a reduced rate (e.g. by local authorities), no notional business income is recognised in the amount of the difference between the standard local rent and the rent actually paid.
If the childcare takes place in premises provided free of charge as a self-employed activity, the lump sum for operating expenses cannot be deducted.
Does the payment of rent subsidies or subsidised letting lead to business income?
The direct rent subsidies that you receive from third parties for renting childcare premises are taxable business income.
However, if childcare rooms are provided at a reduced rate (e.g. by local authorities), no notional business income is recognised in the amount of the difference between the standard local rent and the rent actually paid. If childcare is provided free of charge as a self-employed activity, the lump sum for operating expenses cannot be deducted.
What all counts as business expenses?
Operating expenses include all expenses that are incurred as a result of the care activity. However, contributions paid by the childminder to old-age insurance, accident insurance and appropriate health and long-term care insurance are not business expenses.
A childminder's operating expenses include, for example, the following activity-related expenses for
- Food for the children, equipment (furniture), activity materials, specialised literature, hygiene articles,
- rent and operating costs for the premises used for childcare,
- communication costs,
- training costs,
- Insurance contributions, insofar as they are directly related to the activity,
- travelling expenses,
- Leisure activities with the children.
If the operating expenses are directly related to tax-free income, a tax-reducing deduction is not possible as part of the profit calculation.
Further details can be found in the tax guide for start-ups (points B.2.3.7 to B.2.3.12), which is published by the Hessian Ministry of Finance.
There is also a special feature: day carers can claim operating expenses either by itemising the expenses actually paid or in the form of a lump sum when determining profits by means of a revenue surplus calculation.
What is the advantage of a lump sum for business expenses?
Lump sums simplify the tax return and avoid the tedious task of listing individual expenses and collecting receipts. As a day carer, you can claim the flat-rate business expenses allowance for children in care and, if applicable, the flat-rate business expenses allowance for free places instead of the actual expenses.
What are the conditions for deducting the flat-rate operating expenses?
You can either claim the flat-rate operating expenses or deduct the actual operating expenses. If you claim the flat-rate operating expenses, an additional deduction of the actual operating expenses is not permitted.
If childcare is provided in the child's parents' home or in other premises provided free of charge by the local authority, for example, the following flat-rate operating expenses may not be deducted. In these cases, the operating expenses must be itemised.
How high is the flat-rate operating expense allowance for children in childcare and how is it to be allocated?
The lump sum for operating expenses for looked after children, which was created especially for day carers, is €400 per full-time looked after child per month.
The lump sum is based on a care period of eight hours or more per child per day for five care days per week (= weekly care period of 40 hours). If childcare is provided for fewer hours per day, the lump sum must be reduced proportionately. A deduction of the lump sum for operating expenses is only possible up to the amount of the operating income, i.e. the deduction of the lump sum for operating expenses must not result in a loss.
The monthly lump sum for operating expenses is calculated for each child in care as shown below.
a) Calculation formula:
400 x agreed weekly childcare hours (max. 40 hours)
(8 hours x 5 days =) 40 hours
b) Table for calculating the monthly flat-rate operating expenses for children in care with regular childcare hours:
Monthly flat-rate operating expenses for children in care with regular childcare hours
| Day(s) / week | |||||
| Hours/day | 1 | 2 | 3 | 4 | 5 |
| 1 | 10 | 20 | 30 | 40 | 50 |
| 2 | 20 | 40 | 60 | 80 | 100 |
| 3 | 30 | 60 | 90 | 120 | 150 |
| 4 | 40 | 80 | 120 | 160 | 200 |
| 5 | 50 | 100 | 150 | 200 | 250 |
| 6 | 60 | 120 | 180 | 240 | 300 |
| 7 | 70 | 140 | 210 | 280 | 350 |
| >=8 | 80 | 160 | 240 | 320 | 400 |
Here are some examples:
- Childcare 7 hours a day, 5 days a week: €350
- Childcare 6 hours a day, 5 days a week: €300
- Childcare 5 hours a day, 5 days a week: €250
- Childcare 4 hours a day, 5 days a week: € 200
- Childcare 4 hours a day, 4 days a week: € 160
Please note:
If so-called free places are occupied on a daily basis, the flat-rate operating expenses allowance for children in care, which may be reduced according to the above formula or table, is to be granted pro rata temporis (number of days occupied / flat rate of 20 working days per month).
For periods in which you are unable to complete the agreed childcare hours yourself (e.g. due to holiday, illness or further training), you can only deduct the flat-rate business expenses allowance if the childcare allowance continues to be paid for this time.
How high is the lump sum for operating expenses for free places and how is it to be divided up?
If you are paid ongoing cash benefits in accordance with § 23 SGB VIII for so-called free places (= places that can be occupied at short notice in the event of illness, holiday or training of another childminder), you can deduct a flat rate of €50 per free place and month from the income paid for the free place as operating expenses instead of the actual operating expenses for reasons of simplification. If the free parking spaces are actually occupied, the flat rate for free parking space operating expenses must be reduced pro rata temporis (= ratio of the days on which the free parking space is occupied per month to a flat rate of 20 working days per month).
Is it also possible to provide an itemised statement instead of the lump sums?
Proof of the actual operating expenses is the rule; taking the flat-rate operating expenses into account is a permissible simplification rule. If the actual costs are higher than the total flat-rate business expenses for all children cared for, it is more favourable from a tax perspective to waive the simplification rule. The deduction of actual business expenses requires that all individual receipts are collected and submitted to the tax office in an itemised list. For details on possible business expenses, see "What counts as business expenses?".
Please note:
If the operating expenses are itemised, the additional deduction of flat-rate operating expenses is not permitted.
When and how much tax is due?
Tax is only payable if your total taxable income exceeds the basic tax-free allowance limit of €12,096 in the 2025 assessment period (€12,348 in the 2026 assessment period) for single persons and €24,192 in the 2025 assessment period (€24,696 in the 2026 assessment period) for married persons. If your total income falls below these amounts, no income tax is payable.
In addition to the income from day care (= profit), your total taxable income may also include other income (e.g. income from letting and leasing or other income from pension payments) and that of your spouse if you have applied for joint assessment.
Note:
If you would like to calculate the expected tax burden, you can use the free interactive tax calculator on the website of the Federal Ministry of Finance (BMF).
What is the advance income tax payments all about?
While income tax is withheld monthly from wages in an employment relationship and paid to the tax office by the employer, income tax is levied on self-employed persons using the so-called advance payment procedure. For this reason, the tax office responsible for you will check in the year you set up your business on the basis of the information you provide in the form "Questionnaire for tax registration when taking up a commercial, self-employed (freelance) or agricultural activity or participation in a partnership/community" whether you are required to make advance income tax payments and, if so, how much. In subsequent years, the advance payments are generally calculated on the basis of the income tax resulting from the last assessment. The advance payments are determined in a notice and are to be paid quarterly on 10 March, 10 June, 10 September and 10 December of each year. The advance payments already made are offset against the annual tax liability.
Please note:
Advance payments only have to be made if they amount to at least €400 in the calendar year and at least €100 per advance payment date. If there are any changes in the current calendar year compared to the previous year (e.g. due to the cancellation or commencement of a new childcare contract), you can apply to your local tax office at any time to increase or reduce the advance payments.
What do I need to bear in mind when filing my income tax return?
As a self-employed person, you are obliged to submit an income tax return. This must include the profit from your self-employed activity.
Day carers must make their entries in lines 4 - 6 of Annex S to the income tax return for the year 2025.
If you have chosen the income surplus calculation method to determine your profits, you must always submit the EÜR attachment to the tax authorities electronically authenticated in accordance with the officially prescribed data set as a document for your tax return. The online portal "My ELSTER" offered by the tax authorities is available to you free of charge for this purpose (prior registration required).
At first glance, the EÜR attachment for 2025 appears very extensive. However, if you make use of the business expense allowances, only two entries are generally required. On the one hand, entries must be made in line 16 on the operating income side (see also "What do I have to consider for VAT?") and on the other hand, entries must be made in line 24 of the EÜR annex on the operating expenses side (see also "What is the advantage of the flat-rate operating expenses?", "What are the requirements for the deduction of business expense allowances?", "How high is the business expense allowance for supervised children and how should it be allocated?" and "How high is the business expense allowance for free places and how should it be allocated?").
Note:
All self-employed persons must submit their 2025 tax return electronically to the relevant tax office by 31 July 2026 at the latest (and their 2026 tax return by 31 July 2027 at the latest). You can also use the online portal "My ELSTER" offered free of charge by the tax authorities to submit your income tax return electronically (prior registration required).
You will receive the required certificate when you register with "My ELSTER". Please note that the registration process can take up to two weeks. With the certificate, you can create the tax return directly via "My ELSTER" or submit it electronically authenticated via any authorised third-party software.
Alternatively, you can also register in "My ELSTER" using ElsterSecure. ElsterSecure offers you the option of using your mobile device (e.g. smartphone, tablet) to log in to ELSTER and services that use the ELSTER login. A certificate is no longer required for this type of login. You can use your mobile device to complete registration for My ELSTER and securely store an access key on your mobile device in ElsterSecure. This allows you to access My ELSTER wherever you are. ElsterSecure can be installed via the Google Play and Apple App Store app stores.
You can find more up-to-date information on the ELSTER procedure at www.elster.de. The chat function in the contact details at elster.de will be happy to help you with any questions about "My ELSTER".
The deadline for submitting your income tax return is extended until 1 March 2027 for the 2025 assessment period (and until 28 February 2028 for the 2026 assessment period) if you have commissioned a member of the tax advisory professions to prepare your tax return.
How are childminders covered by health and long-term care insurance?
Self-employed childminders can join a statutory health insurance scheme if they were covered by statutory insurance before they started working as a childminder - either as an employee or as an unemployed person. Those who only provide a small amount of childcare may be covered by family insurance under the statutory health insurance scheme. Day carers can also be insured through a private health insurance company.
The following applies to voluntary members of a statutory health insurance scheme:
Since 1 January 2025, the minimum contribution assessment basis (§240 SGB V) for low-earning self-employed persons has been an average taxable income of more than €1,248.33 per month (or €1,318.33 from 1 January 2026).
Of this, 14% must be paid in contributions for voluntary membership of statutory health insurance. Childminders can also choose to take out additional sick pay insurance in order to receive sick pay or maternity benefit in the event of illness. A total of 14.6% is then due. If the average monthly taxable income from self-employment is less than € 1,248.33 (or less than € 1318.33 from 2026), the minimum contribution of € 174.77 without sick pay (increasing to € 184.57 from 2026) or € 182.26 with sick pay (increasing to € 192.47 from 2026) is due. In addition, the additional health insurance contribution is due, which varies depending on the health insurance company and averages around 2.5 % (increasing to 2.9 % from 2026).
If the actual income is higher than € 1,248.33 (or higher than € 1,318.33 from 2026), the contribution is calculated on the basis of the actual (documented) income.
Long-term care insurance contributions are also calculated on the basis of all income, but at least on the minimum assessment basis of €1,248.33 per month (or €1,318.33 from 1 January 2026) and the current contribution rate and any surcharges and deductions. Since 1 January 2025, the contribution rate is currently 3.6% (if you have at least one child - if you have more than one child, this contribution rate may be reduced) and 4.2% for childless persons aged 23 and over.
Note: The contributions based on income are initially determined provisionally on the basis of the last income tax assessment notice issued. If self-employment has only just begun, the contributions are determined on the basis of the proven expected income.
The final assessment is made on the basis of the income subject to contributions actually realised from the respective income tax assessment. This can lead to back payments or refunds of contributions.
In addition to the reimbursement of accident insurance contributions and half of the contributions for appropriate pension provision, the reimbursement of half of proven expenses for appropriate health and long-term care insurance by the local youth welfare organisation is also stipulated by law. The reimbursement of social security contributions is also tax-free. These do not count as taxable operating income.
The health and long-term care insurance contributions you pay yourself (i.e. the contributions less the subsidies received) can be claimed as special expenses. It should be noted that the full contribution to health and long-term care insurance (including the subsidies) must first be declared in the pension expenses annex. The reimbursed contributions must then be declared in line 21 (statutory health insurance) or line 26 (private health insurance). The same applies to contributions to an appropriate pension scheme. The subsidies received must be stated in line 7.
The following applies to family insurance (§ 10 SGB V):
Anyone who only looks after children in day care for a small amount of time (i.e. is not self-employed full-time) and has a taxable income of less than €535.00 per month in the 2025 assessment period (and less than €565.00 in the 2026 assessment period) can be covered by family insurance as a married person if their spouse is a member of statutory health insurance. Whether a full-time occupation can be assumed must be clarified with your health insurance fund on a case-by-case basis. Sickness benefit insurance is not possible for family members and maternity benefit cannot be claimed.
Contribution rates and contribution assessment limits 2025 - Federal Ministry of Health
Who do I contact if I have further questions?
The service hotline of the Hessian Tax Administration will be happy to help you with general tax questions and questions about ELSTER. You can reach our service hotline free of charge on 0800 522 533 5 from Monday to Friday from 8.00 am to 6.00 pm.
If you have any non-tax-related questions about child day care, please contact the youth welfare office responsible for you, the specialist child day care service or the Hessian Ministry for Social Affairs and Integration. In addition, the FAQs on the website of the Hessian Child Day Care Office contain a wealth of information on child day care, including legal issues.