Tax-free kindergarten allowance for employees

Employers have the option of paying their employees tax-free allowances in addition to their salary for the care of their non-school-age children in kindergartens or similar facilities.

Read the following article to find out which facilities are eligible and which regulations and requirements apply.

Employers can grant employees an allowance for the accommodation and care of children who are not of school age in a kindergarten or comparable facility.

This allowance is exempt from wage tax and social security contributions if it is paid in addition to the salary already owed; salary conversion is not possible.

The actual costs that the employee has to bear each month can be reimbursed in full by the employer. There is no limit to the amount of tax exemption.

Which childcare facilities are included?

• Daycare centers
• Nurseries
• Childminders
• School nurseries

What regulations and requirements apply?

• It is insufficient if, for example, a domestic help or a member of the family in their own household takes over the daycare of the child. In this case, the employer cannot reimburse the expenses tax-free.
• The exemption from income tax and social security contributions only applies to the accommodation and care of children who are not of school age.
• In order to ensure that the income tax-free benefit withstands all audits, it is imperative that the employer keeps all of the employee’s original proofs and receipts for the payroll account.

In addition to tax relief, the kindergarten allowance also contributes to employee loyalty and satisfaction. With this additional benefit, the employer not only signals its support for the compatibility of work and family, but also improves the working atmosphere and loyalty of the workforce.