No you are basically just contracted by the agency to provide care. You are still self employed and as such claim your income as a business. Keep all receipts for things you buy for the kids such as equipement, food, toys, craft supplies. There are forms to fill out to determine what portion of the money you make is actually taxable and then you will pay tax and canada pension based on that amount.

If you go to the canada revenue site there is a little booklet you can download that gives some ideas about the things that you can claim. If you look around this site there may be some other places where we have discussed taxes that you can get ideas from. It really isn't as daunting as it sounds but does mean you need to be organized.

The Ottawa childcare association has a start up kit that you can look at on their webite and it will give you some good information about setting up a home daycare. www.ccprn.com