Childcare is a valuable investment in your child’s development, and it is supported by tax relief. Depending on their personal situation, parents have two clearly defined legal options for claiming childcare costs against tax.
1. deduct childcare costs as special expenses
(§ 10 Abs. 1 Nr. 5 EStG)
Parents can claim the costs of childcare for their child against tax:
- Up to €6,000 per year can be taken into account
- Of this, 80 % is tax-deductible
- Maximum € 4,800 per year since 2025
Example:
With a high personal tax rate (top tax rate), this results in tax savings of up to €2,160 per year.
This option is available to all parents, regardless of their employer, and is taken into account in their income tax return.
2. Employer subsidy for childcare: tax-free & unlimited
(§ 3 No. 33 EStG)
In addition – and particularly attractive – employers can provide financial support for childcare:
- Tax and social security free
- No legal upper limit
- Applies to children who are not of school age
- The subsidy may only be paid in the amount of the actual childcare costs
- Prerequisite: The benefit is granted in addition to the wages owed anyway
The grant can:
- paid directly to the childcare facility or
- be paid to the parents as a tax-free payment via the pay slip
Example:
With monthly childcare costs of €1,596 ( €19,152 per year), this amount can be paid in full tax-free by the employer.
For parents with a high tax rate, this corresponds to an annual financial relief of around €15,670, i.e. around €1,306 per month.
On request, we will be happy to provide you with suitable proof of costs and payments that you need for your tax return or for your employer.
