Work as a childminder

Work as a childminder

If you work as a self-employed childminder special rules apply that mean you are more likely to qualify for benefits or could get a higher amount. This doesn't apply in Universal Credit.

Gross earnings from childminding

You should enter your earnings from childminding separately from other earnings. The amount you get from childminding should not be included under gross earnings, but if you have another job you should enter any earnings from that job under gross earnings.

Please enter your gross income from childminding (your self-employed gross profits) in the box indicated. DWP rules mean that two-thirds of this income is ignored in calculating benefits. The calculator will automatically take off the two-thirds deduction.

In the other box please enter any amount you are allowed to deduct from the remainder of your childminding earnings. You can deduct:

  • notional tax payments,
  • notional National Insurance payments,
  • half of any contributions you make to a pension.

Calculating allowed deductions

To calculate your notional tax and National Insurance payments you should work out how much tax and National Insurance would be payable on the remaining third of your earnings. This amount will be less than the amount of tax and National Insurance that HM Revenue and Customs calculate. If you think that your notional tax and National Insurance is likely to be more then zero you may need to get advice on the amount to enter.

Do not take off any expenses you have incurred as a childminder. Instead of working out what your actual expenses are two thirds of your income is ignored (in lieu of expenses).

Do not take off the earnings disregard you are entitled to. The calculator will work out and apply the appropriate earnings disregard.

You can take off half of any contributions you make to a Stakeholder pension, personal pension or Retirement Annuity Contract. You need to add on the tax relief that the government adds to your contributions before taking half of the gross figure. This relief is normally paid directly by HM Revenue and Customs to the pension scheme at a rate of 20% of the contribution (for anyone below the higher rate band). In practice, this means that for every £1 you pay into your pension you end up with £1.25 in your pension pot, so the amount to use is your net contribution multiplied by 1.25 (if you pay tax at the basic rate) divided by two.

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