Is the actual contribution to daycare in Germany and the possibility of reducing invoices by up to 80% determined? From the year 2025, up to €4,800 per child can be deducted—provided the expenses relate to care, an invoice is available, and payment is made by transfer. Learn how everything is calculated step by step, what counts as costs and what does not—and how to skillfully receive subsidies from the employer or organize an au pair to ensure a positive tax return.
From 2025, 80% of daycare costs can be deducted! Examples show how the tax relief is calculated step by step.
From January 1, 2025, 80% of childcare costs for children can be deducted, but only up to €4,800 annually per child. In practice, this means that the basis for the limit is €6,000: Everything beyond this amount is not considered in the tax return. It is also important that the deduction applies from the first euro, without a minimum threshold. It does not matter whether one is employed—the employment requirement for parents has been abolished, so that the actual, documented childcare costs count.
How is this calculated in practice? Suppose one pays €400 monthly for childcare services (excluding meals and courses). Annually, this amounts to €4,800, so €3,840 is deducted in the tax return (80% of €4,800). If the expenses amount to €6,500, a maximum of €4,800 can still be deducted, as the “base” limit is €6,000, and 80% is only calculated up to this amount. In the event of interruptions in care (e.g., holidays with grandparents), there is no proportional reduction—the limit is annual, but only actual costs incurred can be deducted. Care pauses do not reduce the limit, but lower the total costs that can be claimed.
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An additional tip: For multiple children, the limit is applied separately for each child, which can significantly increase the tax effect and considerably reduce the tax burden in the annual return.
What counts as “childcare costs” and what does not? See the list!
Deductible expenses include daycare fees, childminders, after-school care, and home care if someone actually looks after the child (care, supervision, nurturing—not teaching). Well-planned care activities in facilities that have the character of care and not “education” in terms of imparting specific skills are also included. For example, travel expenses for the caregiver (if contractually agreed and stated on the invoice) can be considered, but not the transport of the child. If care is provided by a relative, the tax office expects a contract similar to one with a stranger (specific hours, remuneration, scope), invoices/receipts, and transfers—this organizes the documents and protects the deduction.
On the other hand, costs without a care element—tutoring, music lessons, computer courses, and membership fees for sports clubs or tennis fees—are not deductible. Catering in the facility is also not deductible; for “package” fees, a breakdown into care/catering/additional activities should be requested, as only the care part is considered in the tax return. In school care, supervision during homework can be deducted, but not tutoring. Ensure precise attachments to the contract with the facility so that you can prove in black and white which elements are care and which are services outside the relief. Such organization of documents makes a difference in the event of inquiries from the tax office and offers security in accounting.
Invoice + transfer or no relief—check which elements are required to prove the claim for relief.
The key to deduction is simple but relentless—an invoice/receipt must be present, and payment must be non-cash (transfer, standing order, or SEPA direct debit). Cash payments disqualify the expenses, even if the facility records everything correctly. The documents should include who, to whom, for what, and how much, as well as the period to which the payment relates. Even for a person employed on a mini-job basis (caregiver), payment is made to the account—there are no exceptions here.
The most common mistakes? Missing division of the fee into care vs. catering/offers, which automatically reduces the deduction base. Furthermore—missing transfer (cash payment, “because it’s faster”), missing contract with the family member who helps, or “too general” a contract without hours and remuneration—the tax office does not recognize this.
Parents often lose the right to part of the deduction due to employer subsidies—if a kindergarten subsidy is granted, this amount reduces the actual burden and cannot be claimed a second time as a relief.
Deduct together or separately in a shared model? Compare options for parents and choose the distribution that offers the highest refund amount.
When jointly assessed as spouses, the topic is uncomplicated, as it does not matter who actually paid the invoice—it counts that the child belongs to your household and the expense is documented.
In the case of separate assessment of spouses, the tax office assigns the costs to the person who actually bore them, but there is still an option—a different distribution can be agreed upon and reported to the tax office (or—if the conditions are met—a 50/50 distribution can be used). In informal partnerships, the parent who pays and with whom the child belongs to the household has the right to the deduction; if both meet these conditions (e.g., parity care “shared model”), each deducts their share, usually up to half of the limit. This is important because a skillful payment arrangement can actually lead to a higher refund.
In practice, it strongly depends on the contract with the facility and the account from which the transfer is made. If only one of you is named in the contract and only that person pays, the other cannot deduct these costs “on their word.” Therefore, especially in the case of income differences, it should be considered who should formally pay the childcare costs so that the deduction in the progression has a greater tax effect where it is more significant. There is also the aspect of “household membership”: If the child is not registered with the parent who wants to use the relief, hard evidence is required that it actually belongs to their household (e.g., actual residence, benefits granted). Detailed? Yes—but that is exactly what decides whether the €4,800 annual limit is your advantage or not utilized.
An employer subsidy for care is a great benefit but acts as a cost reducer in the German annual tax return—if a subsidy/bonus for kindergarten is granted, your actual burden decreases and only this can be the basis for the deduction. Example: You pay €400 monthly, but the company adds €100. The actual cost amount is €300, so annually €3,600, and from this, you deduct 80%—€2,880. Double usage is excluded: this is logical and is unfortunately often overlooked when someone “looks at the invoice” and not at the net transfers from their own account. Keep transfer confirmations and employer letters in the documentation—in case of questions, you can prove that everything is correct to the cent.
Maciej Szewczyk
He gained experience as a consultant on IT projects for many international companies. In 2017, he founded the startup taxando GmbH, where he developed the innovative tax app Taxando, which simplifies the filing of annual tax returns.
Maciej Szewczyk combines technological expertise with in-depth knowledge of tax regulations, making him an expert in his field. In his private life, he is a happy husband and father and lives with his family in Berlin.
