Family Business

by | May 18, 2023 | News

Keeping It In The Family

The little known tax hack…….how to make your children aged 14 and up tax efficient (at last)

Attention business owners that may have children, nephews, nieces or even just a neighbour aged 14 or over. This really is a must read for you.
Have you ever considered employing this teenager and making them earn their grit?

When a human in Ireland turns 14, they can legally start working albeit with restrictions as to how long they can work, when they can work, the type of work and term-times versus not term-time.
There is no denying that if you are indeed the owner of a teenager you are all too aware of just how expensive these little darlings can be. Clothes, treats, day trips, gadgets….the list is endless. You are constantly forking out money from your own after-tax money so why not flip this? Let’s imagine a world where you can actually make your child tax efficient and now you can legally employ your offspring the day they turn 14 and put them to work (light work) in your place of business a few hours on a Saturday doing some filing, shredding, admin or generally anything related to your business activity that is suitable to their age. You now have them actually earning their own pocket money and even better, it is a fully tax-deductible business expense which means not only will the business pay their wage but you will have a reduced corporation tax/income tax liability.

An ever greater benefit is that one would assume you will be paying this 14 year old a small wag so they will not have any PAYE or USC liability in the year and children under the age of 16 will not have to pay PRSI. This means there will be little to no additional costs to you the employer such as employers PRSI. (Check out the Class M PRSI conditions too as this could knock you out of the category of having to pay employers PRSI on their behalf if they are aged 16 or over).

Is this not genius? Are we all now counting down the days until our children turn 14?!
Now there are conditions attached to this as we are, after all, talking about children so there are restrictions as to when teenagers can work depending on a number of factors the biggest being is it term-time or not and how many hours is this fabulous new employee allowed to work in a week. Always do your homework and check the legalities and conditions around working hours for children aged 14 and over as you don’t want to get a rap on the knuckles from the WRC.