# Child Care and Contract Work



## Xoron (Jun 22, 2010)

My wife will be starting part time contract work in the next few weeks. Because of this, we'll be incurring slightly higher child care costs.

Can we claim the child care costs against her contract income? Or do the child care costs only count towards "employment" income? She isn't incorporating, just getting the income as a contractor, rather than part time employee.


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## MoneyGal (Apr 24, 2009)

It's still employment income, as you will see next year at tax time - so yes, child care is deductible (within limits) against that income.


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## Xoron (Jun 22, 2010)

Thanks (Again) MG


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## fraser (May 15, 2010)

And don't forget, she will have to pay the employee and employer CPP premiums. CPP folks have specifically asked CRA to put a flag in the system to catch this. I know....my daughter was re-assessed on her contract work.


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## Xoron (Jun 22, 2010)

fraser said:


> And don't forget, she will have to pay the employee and employer CPP premiums. CPP folks have specifically asked CRA to put a flag in the system to catch this. I know....my daughter was re-assessed on her contract work.


Fraser, do you know how much that would be?


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## MoneyGal (Apr 24, 2009)

Employer and employee each contribute 4.95% of CPP-eligible earnings: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/cnt-chrt-pf-eng.html

Employer portion is deductible and employee portion gives rise to a tax credit. 

Also - deduction of both employee and employer portions on self-employment income should be *automatic* in every tax software program. If it is employment income (apart from the non-eligible employment income) contributions are due and if there is no employer other than the "self", you pay both portions.


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## sprocket1200 (Aug 21, 2009)

if she is not earning a minimum of $60,000 it will NOT be financially viable for her to work at a full time position. simply ratio this to her part time hours. 

having said that, most women don't work for the finances.....



Xoron said:


> Fraser, do you know how much that would be?


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