Depending on your circumstances, you could save up to £933* a year on your childcare costs.
The Government has set a limit for childcare vouchers based on tax bands:
› £243 each month for a Basic rate tax-payer;
› £124 each month for a Higher rate tax-payer; and
› £110 each month for an Additional rate tax-payer.
Parents who joined their employers childcare voucher scheme before 6 April 2011 may have Protected Rights
and still be able to receive £243 each month in childcare vouchers irrespective of their tax band.
Some employers allow their employees to take more than the capped amount. However, any additional childcare vouchers over the Government limit are not tax-free and NI-exempt.
A number of state benefits - Statutory Sick Pay for example - are dependent on maintaining a minimum level of NI. Your gross pay, after deducting the value of your childcare vouchers, must not be less than £10,000 a year in the April 2014-15 tax year.
*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 you make will depend on your circumstances.