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What are childcare vouchers?


Childcare vouchers are an employee benefit exempt from tax and National Insurance (NI)

 
Your employees can sacrifice up to £243† a month (£55 a week) of their gross salary for childcare vouchers. This part of their salary will be exempt from tax and NI contributions, so each parent can save up to £933* a year, on their childcare costs.
 

They can be used to pay for all types of registered childcare

 
And they can be used for children up to 16^ years old:
  • school holiday schemes and clubs
  • activity holidays
  • out of school clubs
  • breakfast and after-school clubs
  • nurseries, playgroups and crèches
  • childminders
  • nannies and au pairs

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 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 taxpayer can request each month to £243 for a Basic rate taxpayer, £124 for a Higher rate taxpayer and £110 for an Additional rate taxpayer.
 
*Figures quoted are the maximum available savings for a Basic rate taxpayer. Higher and Additional rate taxpayers 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 taxpayer taking the full £243 voucher value. The maximum savings available will be less for Higher and Additional rate taxpayers.


  

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