What is the Daycare Allowance?

It’s a voluntary employer benefit to financially support working parents. It applies to childcare for non-school-aged children in external care institutions such as daycares, nurseries, or kindergartens.

Who is eligible for the Daycare Allowance?

Employees with non-school-aged children who are cared for in an external facility and can provide proof of childcare expenses.

How much is the Daycare Allowance?

There is no legal maximum amount. The amount is defined by the employer and is fully tax- and social security-exempt if conditions are met.

What are the requirements for a tax-free Daycare Allowance?

• The benefit must be paid in addition to the salary

• It must be for a non-school-aged child

• Childcare must be provided by an external institution

• Proof of childcare expenses is required

• The payment must be designated specifically as a daycare allowance

Which documents must employees provide?

• Copy of the care contract or

• Invoices from the care facility

These can be uploaded in the app or via the employer portal.

What happens to the documents if the allowance ends?

All uploaded documents remain archived and accessible in the portal - even after the allowance has ended.

Can the daycare allowance be paused or modified?

Yes, the employer can adjust the configuration anytime - change the amount, set an end date, or pause the benefit.

What should be done if the childcare situation changes?

Ask the employee to notify you immediately in case of a change (e.g. new facility, updated costs, new contracts).

Request new proof and adjust the configuration in the employer portal accordingly. This ensures continued eligibility for the tax-free allowance.

Translation Note: This article has been translated using automatic translation software to provide the reader with a basic understanding of the content. Despite reasonable efforts to provide an accurate translation, we cannot guarantee its accuracy.

If there are any questions regarding the accuracy of the information in the translated article, please refer to the German version of the article, which is the official version.