How must I employ a domestic help in order to deduct the costs?
How you can claim expenses for your domestic help in your tax return depends on the basis on which your domestic help is employed. If you have employed help in a mini-job, you can claim 20 percent of the expenses, up to a maximum of 510 Euro per year, as a tax reduction.
If you have employed domestic help subject to social insurance contributions or hired a self-employed service provider, you can claim 20 percent of the costs, up to a maximum of 4.000 Euro per year. This also applies to care and support services. For craftsmen's services, you can claim 20 percent of the expenses, but only up to a maximum of 1.200 Euro; material costs do not reduce taxes.
If you employ domestic help subject to social insurance contributions, you should know the following: You will need the tax identification number so that you or your tax advisor can access the electronic wage tax deduction features (ELStAM), which are stored in a file at the tax office, and calculate the monthly wage tax correctly. You must register your domestic help with the relevant health insurance company and pay the employer's share of the health insurance.
You also pay half of the contributions to unemployment and pension insurance. For the tax reduction in your tax return, both the wages and the social security contributions are accepted. You can also have household-related work carried out by a self-employed service provider and deduct 20 percent of the invoice from your taxes.
The costs for an au pair can be declared as household-related services for one half and as childcare costs for the other half. This also includes the non-cash benefits for free accommodation and meals. You can also employ domestic help on a mini-job basis to work in your private household.
You must register this employment as a mini-job with the Minijob-Zentrale - the Knappschaft Bahn See. You must use the household cheque procedure for this. The Minijob-Zentrale collects the flat-rate deductions twice a year. The deductions for the second half of the previous year are still credited to the previous year for tax purposes, even if they were not collected until January of the current year.
As the employer of the mini-jobber, you can choose whether the wages are taxed according to the electronic wage tax deduction features with monthly wage tax deduction or at a flat rate of two percent (including solidarity surcharge and church tax). In the tax return, you can declare the wages of your domestic help and the additional amounts such as flat-rate contributions and wage tax.
Even if the value of free board and lodging is not included in the calculation of the flat-rate contribution and flat-rate tax, this value is still part of your expenses for which you can claim the tax reduction. The official non-cash benefit values are decisive.
