Childcare vouchers are an employee benefit exempt from tax and National Insurance (NI)
Once your organisation is registered with Computershare Voucher Services, your employees can sacrifice up to £243† a month (£55 a week) of their gross salary for childcare vouchers. This portion of their salary will be exempt from tax and NI contributions, allowing each parent to save up to £933* a year, on their childcare costs.
They can be used to pay for all types of registered childcare
Parents can save money on all types of registered childcare for children up to 16^ years old. This includes:
- Day nurseries
- Au pairs
- Out of school clubs
- Holiday schemes
- Activity clubs
- Qualifying Childcare offered by schools.
Childcare vouchers can help your company save money too!
Childcare vouchers are also NI exempt for employers. This means you can save up to £402** a year in reduced NI contributions for each participating employee.
They are an established Government initiative to support working parents
Launched in 1998, childcare vouchers are a scheme run by HM Revenue & Customs (HMRC).
†For parents joining a scheme from 6 April 2011, the Government has capped the amount of childcare vouchers a tax-payer can request each month to £243 for a Basic rate tax-payer, £124 for a Higher rate tax-payer and £110 for an Additional rate tax-payer.
*Figures quoted are the maximum available savings for a Basic rate tax-payer. Higher and Additional rate tax-payers may save around £623 a year. The savings parents make will depend on their circumstances.
^1 September following 15th birthday or 1 September following 16th birthday for children who are registered disabled.
**Annual employer NI savings for a Basic rate tax-payer taking the full £243 voucher value. The maximum savings available will be less for Higher and Additional rate tax-payers.