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 taxpayer
› £124 each month for a Higher rate taxpayer
› £110 each month for an Additional rate taxpayer
Parents who joined their employers childcare voucher scheme before 6 April 2011 may have Protected Rights
. This means you could receive £243 each month in childcare vouchers irrespective of your tax band.
Some employers allow their employees to take more than the capped amount. However, any extra childcare vouchers over the Government limit are not tax-free and NI-exempt.
Some 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, cannot be less than £10,600 a year in the April 2015-16 tax year.
*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 you make will depend on your circumstances.