Question: I mind children in our home during the week. It started off as helping neighbours but it has become a regular bit of income. We’re not talking huge money, but it could be €10,000 to €15,000 a year. My husband is farming and we’re worried that if we put it through the tax return, we could end up losing most of it in tax, USC and PRSI. I’ve also heard that the rules around Tusla registration for childminders are changing. Does that mean I need to register now, and does it affect the tax relief?

Answer: This is exactly the type of household income that causes unnecessary worry. It almost always starts small – a neighbour needs a hand, a cousin goes back to work, or a family nearby cannot secure a crèche place. Before long, what began as a casual favour becomes a steady, reliable income stream.The good news is that the tax legislation contains a specific relief designed to keep small-scale, home-based childminders on the right side of Revenue.

It is called Childcare Services Relief, and the magic number to remember is €15,000.

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If you provide childcare services in your own home and your gross receipts do not exceed €15,000 for the year, the income is entirely exempt from Income Tax and the Universal Social Charge (USC).

What you need to know

There is no such thing as a completely tax-free holiday, and there are strict conditions you must watch to ensure you do not lose the relief entirely:

• It is based on gross income: this is the biggest trap for households. The €15,000 cap is based on total turnover, not your final profit. You cannot take a tax deduction for the cost of food, toys, heating, or insurance first. If parents pay a total of €15,501 in a calendar year, you lose the relief entirely on every single penny, not just the extra euro.

• The three-child limit: the relief only applies if you mind no more than three children at any one time. Your own children or permanent residents of the house do not count. The test is a snapshot, not a weekly average; minding two children on Monday and four on Tuesday breaks the rule.

• In your own home: the service must be physically provided in your own family home. It does not apply to nannies or babysitters travelling to the children’s house.

• Notify the Childcare Committee: to validly claim the relief, you must notify the person recognised by the Health Service Executive for the purposes of such notification that you are operating.

What about PRSI?

While Income Tax and USC are wiped out, Class S PRSI still applies at a rate of 4%, subject to a minimum annual payment of €500. Do not look at this as a penalty. Paying that €500 minimum means you build up your own self-employed social insurance record, which protects your entitlement to the State Contributory Pension down the line. For many spouses working on or off the farm, this is an excellent, low-cost way to secure your own pension stamps.

The changing Tusla rules: you are quite right that the landscape is shifting. Following new regulations introduced in late 2024, childminding is transitioning from an informal arrangement to a fully regulated system.

A three-year statutory transition period is currently under way, running until 30 September 2027.

If you mind three or fewer preschool children (or six or fewer children in total), registration with Tusla is voluntary for now. It will become mandatory from October 2027. However, if you exceed those specific numbers today, you must register immediately.

Paying that €500 minimum means you build up your own self-employed social insurance record, which protects your entitlement to the State Contributory Pension down the line. For many spouses working on or off the farm, this is an excellent, low-cost way to secure your own pension stamps

Getting ahead of the crowd and registering with Tusla during the transition period carries a massive practical benefit. Once registered, the parents using your services can access the National Childcare Scheme (NCS) subsidies. This makes you far more attractive to local families, as it slashes their net childcare costs without impacting what you get paid.

The verdict

The tax return should still be filed annually by 31 October. Claiming the relief requires registering as self-employed and declaring the income on a Form 11 return. Staying off the books because the income is small or exempt is a dangerous mistake.

Keep a simple notebook tracking who was minded, the dates and the exact amounts paid. Use the relief properly and it is a fantastic boost to the household budget, use it casually and you risk an expensive headache with Revenue.

Marty Murphy is head of tax at ifac, the professional services firm for farming, food and agribusiness.