Childcare vouchers
Employers may offer their staff childcare vouchers, the first
proportion of which are free of tax and National Insurance
contributions each week for both the employer and the employee.
Vouchers are available to parents as long as the childcarer they
use is registered or approved. Childcare vouchers can be used to
pay for the care of children up to the age of 15 (until 1st
September following their 15th birthday) or the age of 16 if they
are disabled (until 1st September following their 16th
birthday).
This is a clear benefit for you as a working parent. Because you
don't pay tax or National Insurance contributions on the first
proportion you could save a significant amount each year. And
employers could save money too – plus reduce short-term absenteeism
and attract more people back after maternity leave.
The most common way of accessing vouchers is via "salary
sacrifice" where you agree to convert a proportion of your salary
into vouchers. No tax or NI contributions are paid on the first
proportion per week of a salary sacrifice.
There are childcare voucher companies who will administer the
scheme on behalf of your employer, and will ensure that the
payments are made correctly to your childcarer.
HM Revenue and Customs has an online calculator which help you
calculate whether you would be better off using childcare
vouchers.
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