Tax refund for child care & Au Pair costs

An Au Pair is a really affordable and reliable solution when it comes to childcare. Parents have to spend less money on a person from abroad to watch their children than for a local nanny or kindergarten. Yet the costs for an Au Pair sum up to a few thousand euros, pounds, dollars or whichever currency you have in your home country. Many Host Families wonder if they can set off the costs for an Au Pair against tax liability.

How does it work?

In many countries it is possible to get a tax refund for childcare, like payments for schools and kindergarten. Whether the costs for an Au Pair are refundable or partly refundable, this depends on the Host Family’s home country.

A good example is Germany: Here it is possible to get a tax refund for child care up to 4000 € per child. The state usually sees an Au Pair as 50% childcare and 50 % help in the household. If families want to state that the Au Pair is not spending 50% of her/his time cleaning the house they should make that clear in the contract. They could write something like: “child care 85% and household tasks 15%”.
Also the Au Pair should always get paid via bank. Cash payments will not be considered by the finance office.

Another example is Norway: Families can claim a deduction from their income for documented expenses for the minding and care of their children. Just like in Germany, the Host Family has to pay for childcare via a bank. Multiple payments that relate to a single childcare option, like an Au Pair, are considered to be one payment with respect to the threshold.

Since the regulations differ from country to country, we can‘t give specific information about each country but now you know that it is possible to get a tax refund for childcare in some countries. You should get informed at your local finance office.