Childcare for Employees and Business Owners
Friday 04 September 2020
What financial assistance is available in France in support of childcare for working families?
The two main forms of assistance are a social benefit called Complément de Libre Choix du Mode de Garde and one of two tax credits, crédit d'impôt.
Complément de Libre Choix du Mode de Garde – CMG.
The CMG is a social benefit administered by the Caisse des Allocations Familiales (CAF), the government agency responsible for social support to families.
If you employ a registered nanny or a professional childminder you may be eligible for CMG.
In order to benefit from CMG several conditions apply:
- Your child must be below 6 years of age on 1st Jan of the tax year;
- The childcare provider must be an accredited childminder, registered nanny or nursery;
- Their gross daily salary must not exceed €50.15, per child;
- They must be looking after the child for at least 16 hours a month.
In addition, at least one person in your household must be working.
If you work with an association or company that employs a childcare assistant or someone in the home, you can also benefit from the CMG, provided your child is looked after at least 16 hours per month.
CMG will not meet all the costs of the childcare. The amount you will pay will depend on your income and how many children you have and their age, but you will always be responsible for at least 15% of the total cost.
The table below shows the income limits that apply for up to three children, for 2020. The assessment is based on your income for 2018, as declared on your 2019 income tax return.
|Number of |
These limits are 40% higher if you are a single parent.
The monthly contribution paid varies according to the three income levels and the age of your child, as shown in the table below.
|Under Three Years||€468,82||€295,62||€177,35|
|Three to Six Years||€234,41||€147,83||€88,68|
The amounts are significantly higher if you are a single parent, your partner or child is disabled, or if your child is cared for during the night, during holidays or on Sundays.
As an employer of the childminder you are responsible for making employer social security payments, but there is support with these charges.
Where you use an accredited childminder (assistante maternelle agréée) the authorities will pay 100% of the charges. However, if you employ a registered nanny (garde à domicile) in your home, you will only be entitled to 50% support. In addition, the maximum amount paid in this case is €452 for children aged 0-3 years and €226 for children aged 3-6 years.
If your child is taken care of through an association, company or nursery, a partial contribution is made by the CAF for the childcare provider’s social security payments. The amounts vary by your income, category of childminder and age of child.
You need to find and engage a childminder in a signed contract of employment. The contract will need to specify hours, salary, and grant a right to annual leave etc.
To assist in the search for a suitable childminder you can use the State run service at MonEnfant.
The benefit is paid by the Caisse des Allocations Familiales (CAF). Agricultural professions need to apply through MSA.
You make an application for CMG on-line at Faire une Demande de Prestation - CMG.
If your application is approved, CAF will notify the national administrative centre Pajemploi, which is effectively a payroll service provided by the social security collections agency URSSAF.
The service will undertake the registration of employing parents, the calculation and deduction of contributions due for the employment of a certified childcare assistant or home childcare, and on the other hand, the management of employees. The Pajemploi centre publishes pay slips and sends them every month to the declared employees.
All you need to do is register with them and inform them of the salary of your childminder. They will advise you of the amount that is left for you to pay after payment of CMG. Indeed, with the agreement of the childminder, they can also pay them by direct debit from your bank account.
You can also deduct a percentage of the cost of childcare from your annual tax bill.
If you pay less in income tax than the amount to which you are entitled by way of a tax credit, the balance is paid to you by the tax authority.
To obtain a tax credit you will need to make a claim on your income tax return using the Form 2042 RICI.
The amount deductible depends on whether your child is looked after outside your home (for example, in a nursery or with a registered childminder) or at your home (for instance, a nanny).
i. Crédit d’impôt Frais de Garde d'enfant hors du Domicile
For a child looked after outside of their home, a tax credit equal to 50% of the costs of the childcare is available. Only the care costs are eligible with food costs specifically excluded.
The child must be under six years of age and cared for by a registered childminder or establishment that cares for children under six years (crèche, halte garderie, garderie scolaire, centre de loisir).
The tax credit is limited to eligible costs of €2,300 per child at the rate of 50%, giving a maximum tax credit of €1,150. If you are also in receipt of CMG or other forms of assistance, such as that from your employer or local council, then the tax credit is the amount after deduction of this assistance.
The tax credit is available to grandparents provided their child is part of their ‘fiscal household' (foyer fiscal)
ii. Crédit d'impôt pour l'emploi d'un Salarié à Domicile
A more generous tax credit is available if your child is looked after in your home, either by you engaging directly a registered childminder, or via an accredited provider.
The tax credit is up to a maximum of 50% of eligible costs, with an expenditure ceiling of €12,000 per year, plus €1,500 for each additional child up to a maximum of €15,000. (In the first year the ceiling is €15,000, plus €1,500 for each additional child up to €18,000.)
In other words, if you had two children, the maximum tax credit each year is €7,500.
The eligible costs of childcare includes the salary and social security payments.
Once again, if you receive the CMG, the tax credit is calculated after the CMG and other assistance have been deducted.
iii. Home and Away
Where your child is cared for at home by a childminder, but they also attend an establishment outside of the home, then it is possible to obtain a tax credit for both forms of tax care.
The tax benefit that can be derived is up to a maximum of €10,000 per year, which is a global ceiling set on all ‘niches fiscales’.
Mention must also be made of the services schools offer.
Nursery school (école maternelle) is free for all children aged 2-6 and is a service aimed at preparing children for primary school (école primaire) at age 6.
Attached to the schools there is usually a before and after school club service (garderie scholaire), which is also provided during school holidays.
Before school club generally begins at 7.30 am until school at 8.45 am and after school club from 4.30 pm until 6.30 pm. School holiday clubs provide a full programme of activities and even trips.
The school club service is very low cost and will help to cover the working day. Again, the price will depend on your circumstance and the region but can be as low as 9 centimes a session.