Household help - Household-related service
January 19, 2011 | 20,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
Dear tax consultant,
I would like to employ a household help for various tasks (cleaning, ironing) in my household. I have already placed an advertisement in the local newspaper and some household helpers have responded.
I would like to deduct the costs of the household help. These are household helpers with whom I settle directly (private individuals). What do I need to consider in order to be able to deduct the costs as a household-related service? Do the household helpers (usually recipients of Hartz4 benefits) need to invoice me, or can I write some kind of "pay slip" and hand over the money in cash? What would be the most cost-effective and legally correct way for me to proceed?
Thank you.
Dear Ratuschende,
Thank you for your inquiry, which I would like to answer based on your information and in the context of your involvement in an initial consultation as follows:
If you hire a private individual for your household who is not affiliated with a service company, an employment relationship exists: you are the employer, and the private individual is the employee. It is either a) a marginal employment relationship (up to 400 euros per month) or b) a regular social security employment relationship, with the deduction of income tax and social security contributions to a normal extent.
In case of a), your income tax will be reduced by 20%, up to a maximum of 510 euros per year,
in case of b) by 20%, up to a maximum of 4,000 euros per year.
The salary for the work performed must be paid into the account of the private individual in order to claim the tax deduction.
The matter is very complex, so I must advise you to seek comprehensive advice from a tax advisor to avoid any mistakes.
Best regards,
Ulrich Stiller
Tax Advisor/Business Economist
