Hiring a nanny for childcare is, in many cases, the perfect solution: ideally the arrangement is long-term, and a relationship of trust quickly develops that benefits everyone.
But before the nanny starts working in your household, there are a few organisational and legal details to clarify. Things get a little more complicated once a household helper or carer earns more than €450 a month and can no longer be registered as a minor mini-job.
We have put together the most important points on registration, finances, authorities and more in a short guide.
Where do I need to register my nanny?
That depends on how much she earns. If the nanny works for a maximum of €450 a month, she can be registered as a mini-job. This is quick and simple via the Minijob-Zentrale website. In this case, the employer pays the required social security contributions as a flat rate.
If the nanny earns more, registration is somewhat more involved and you will need to contact several authorities: first you need a company number, which you get from the Betriebsnummern-Service of the Federal Employment Agency, where you can also apply for your company number directly online.
You also need to register the caregiver for social insurance. To do this you generally contact the nanny’s statutory health insurance fund. Among other things, you will need her social insurance number. If she does not have one yet, you provide further details such as place of birth, birth name and date of birth to the health insurance fund, which will then contact the pension insurance authority so a social insurance number can be issued.
What further obligations does the employer have?
Registration is sorted and the nanny starts her job? Then there are further points to keep in mind so the employment continues to run correctly. Especially important, of course: the employment contract and the payslip. There are suitable programs and templates for both, which can be downloaded online. Lawyers or your local Chamber of Industry and Commerce can also be good contacts for information and for putting together the necessary paperwork.
Finances and more: the tax framework
In a regular employment relationship, the employer withholds income tax and pays it to the tax office. Special rules apply for mini-jobs as well as for midi-jobs, which cover a sliding-scale earnings band between €450 and €850 a month (from 1 July 2019, €1,300). It is best to discuss the exact details directly with your local tax office.
Tip: Tax savings for childcare
A nanny can be claimed for tax purposes as a household-related service: expenses for a household helper employed subject to social insurance contributions can be deducted directly from your tax liability. The employer can deduct 20 percent of expenses up to €20,000, a maximum saving of €4,000. But note: for mini-jobs, a maximum of €510 per year is deductible. It is also important that the money is not paid in cash, but transferred to the household helper or nanny by bank transfer.
Alternatively, you can claim childcare costs at home as a special expense. This makes particular sense if you have not yet reached the cap with your daycare, nursery or after-school care costs. That cap is €4,000 per child per year, of which two-thirds of the actual costs can be claimed. The maximum saving is therefore reached at costs of €6,000 per child.
Minimum wage applies to childcare too
You agree the nanny’s pay with her individually. Important to note: under the Minimum Wage Act, every employee is entitled to pay of at least the statutory minimum wage. Since 1 January 2019 this has been €9.19 (gross) per hour, and from 1 January 2020, €9.35 (gross) per hour.
When the nanny takes holiday
Your nanny is also entitled to paid holiday. The statutory minimum entitlement is 4 weeks a year. For a 5‑day week that would be 20 paid holiday days, for fewer working days per week, the entitlement is calculated proportionally. The employer can set the timing of the recovery leave, but may not do this for the entire entitlement. The household helper is allowed to plan a certain portion freely, roughly half of the total entitlement under current case law.
What about foreign nationals?
Foreign household helpers may only work in Germany if they hold the necessary permit. Nationals of a third country need a residence title, such as a visa, a residence permit, or a settlement permit, that expressly permits work.
Better safe than sorry: these insurance policies matter
Accident: Your household helper will in any case need a number of insurance policies. Accident insurance is already included for mini-jobbers; anyone earning more needs a separate policy, through the German Statutory Accident Insurance responsible for household helpers.
Liability: Liability insurance is also important. As a rule your nanny will have her own personal liability insurance, but you can also co-insure her under your own liability policy, which only covers damage to third parties, for example at the playground. For damage within your own household, the nanny would need her own professional liability insurance.
Household contents: Household contents insurance covers damage caused by, say, fire, burglary or water leaks. Since every household ideally already has contents insurance, these cases are already covered.
Contribution scheme: What happens if the nanny is off sick or due to pregnancy? She is then entitled to continued pay, or maternity pay. As an employer you can, or must if you have fewer than 30 employees, cover yourself through the U1 and U2 contribution schemes, with the health insurance fund covering part of the payments.
Conclusion: not entirely simple, but worth it
All in all, employing a nanny does involve some effort. Registering as a mini-job is considerably simpler, but in many cases your nanny will work more hours than the €450 cap allows. Registering as a midi-job could also be worth considering.
Our tip: just ask! Authorities have customer service points too, and a lot can be done online these days.
Of course we are also happy to help as a service provider. Let us know how we can support you. We are here for you at any time, and we are delighted when we can place exactly the right nanny, childminder or babysitter for your family.
