Having your children work in your business: pay, tax and rules
Written by Ilias Aarrass6 min read · Published on · Last reviewed on 
In short
If you pay your child for work in your business, that is a salary. If your child is at least 15, lives at home and the family bond dominates, there is deemed employment and with a sole proprietorship, general, professional or limited partnership you can use the simplified scheme: one payroll tax return a year. The salary is deductible from your profit.
- The simplified scheme applies to children living at home from age 15.
- You then file a payroll tax return once a year.
- In deemed employment your child is not insured for employee insurance.
- The salary must fit the work and go into your child's own account.
In many family businesses children simply help out: in the shop, in the van, in the workshop or behind the laptop. As long as it is just lending a hand, nothing happens for tax purposes. But if you pay your child for the work, you are an employer and the rules for wages apply. That sounds heavy, but for children who live at home and are at least 15 there is a simplified scheme. And it can be tax-efficient: the salary is deductible from your profit, while your child often pays little or no tax on it thanks to the tax credit.
Real or deemed employment
If your child works under the same conditions as other employees, with a normal contract, fixed hours and the same pay, there is a real employment relationship. Your child is then an ordinary employee, including employee insurance, and you process the salary through normal payroll.
If the family bond dominates, for example because you are more lenient about absence or give your child tasks you would not give a stranger, and your child is at least 15, there is deemed employment. You then do withhold payroll tax and national insurance contributions and pay the employer's health insurance levy, but your child is not insured for employee insurance and you pay no contributions for it either.
The simplified scheme
If you have a sole proprietorship, general partnership, professional partnership or limited partnership, and your child works in deemed employment, you can use the simplified scheme for working children. The conditions are that your child is at least 15, works in your business and belongs to your household.
The advantage: you file a payroll tax return only once a year and pay the payroll tax only once a year as well. You do not need detailed payslips; a wage record in your administration is enough. You report use of the scheme to the tax authorities with the form for employers with working children.
- Agree a reasonable salary that fits the work and age.
- Register as an employer with working children with the tax authorities.
- Have your child opt for the payroll tax credit with you, if they have no other job applying it.
- Record the hours worked and salary paid each month and pay by bank transfer.
- File one payroll tax return after the end of the year.
What does it bring?
For you, the salary is an ordinary business expense: it lowers your profit and thus your income tax. Your child pays payroll tax, but with the payroll tax credit that often stays at zero for a side-job amount. Part of the income thus shifts from your highest bracket to a zero rate.
It does have to be genuine. The salary must fit the work your child does, and it must really go to your child, into their own account. A high amount for a few hours a month, or wages that in practice disappear into the household budget, will not hold up in an audit. Also note the employer costs such as the employer's health insurance levy.
Your partner or your child?
Different rules apply to a working partner: no salary, but the working partner deduction or a labour remuneration. Those schemes do not apply to children. If you have a BV, your child is simply an employee of the BV and the simplified scheme does not apply.
Frequently asked questions
From what age can I pay my child a salary?
The simplified scheme and deemed employment apply from age 15. Younger children may only work to a very limited extent under the Working Hours Act.
Is the salary paid to my child deductible?
Yes, if it fits the work your child actually does and you pay it by bank transfer into your child's own account.
Do I have to file a payroll return every month?
Not if you use the simplified scheme for working children. You then file once a year.
Sources
- Payroll tax notification for employers of working childrenBelastingdienst · belastingdienst.nl
Sources checked on
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
