If you hire a private day care provider
You can hire a day care provider and receive for a child under 3 years of age or for a child under school age. In that case, you are the day care provider's employer. Several families can also get together to hire a day care provider.
If your child is in a private day care centre or looked after by a private family day care provider, you do not enter into a contract with the day care provider and you are thus not the day care provider's employer. You can still be granted private day care allowance, which Kela pays to the day care provider. Kela withholds taxes on the allowance.
Parents employing a day care provider
When you hire a day care provider under an employment contract, you must, as the employer, withhold taxes on the wage according to the day care provider's tax card. In addition you must pay social security contributions and statutory insurance contributions, including unemployment insurance contribution, earnings-related pension contribution, workers' compensation and group life assurance premium. Pay the contributions for the whole wage, also for the share corresponding to the allowance paid by Kela.
When a private household acts as employer it must also arrange occupational health care for the employee.
Day care pool, i.e. day care provider for several families
The family can hire a day care provider together with one or several other families. In such a day care pool, one day care provider looks after the children usually by turns in each child's home. Each family can receive child home care allowance for a child under 3 years of age or private day care allowance for a child under school age. The amount of the allowance is affected, for instance, by the time of day care. The municipality (locality) may also pay a municipal supplement to the allowance. You can use the calculator to estimate the amount of allowance for your family. The families agree themselves on the wage payment to the day care provider.
Kela pays child home care allowance to the family, and the family can use the allowance to pay wages to the day care provider. A day care provider hired by a family that receives child home care allowance does not have to be approved by the municipality.
Kela pays the private day care allowance directly to the provider (separately for each child) The private day care allowance can never exceed the child care fee. Each family has to sign a contract of employment with the day care provider and handle their share of the statutory contributions.