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Savings and eligibility


1. How much can I save?
 

If you are a Basic rate taxpayer, childcare vouchers help you to save up to £933 per year, per parent. Higher and Additional rate taxpayers could save around £623 a year. The savings you make will depend on your circumstances.
 
To see exactly how much you could save, click here to use our free online savings calculator.

 

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Salary bands based on UK rates. From April 2017 Scotland may be different.

2. Is there a limit to the amount of vouchers I can have?

 
Each eligible working parent is entitled to claim tax-free and NI-exempt childcare vouchers up to a maximum of:
 
Basic rate tax-payer:
£243 a month
£55 a week
Higher rate tax-payer:
£124 a month
£28 a week
Additional rate tax-payer:
£110 a month
£25 a week
 
 
Both parents can sign up for childcare vouchers, as long as both their employers offer a childcare scheme. This means that a family with two working parents paying Basic rate tax can receive up to £486 a month (or £110 a week) in childcare vouchers and make a saving of up to £1,866* a year on their registered childcare costs.
 

Some employers may allow working parents to order more than the upper amount, but the value above the will be subject to tax and National Insurance. There is a minimum childcare voucher order of £20 per pay period.

 
 

 

 

 
3. If I pay Higher rate tax, can I still claim childcare vouchers?
 
Yes, childcare vouchers are available to Basic, Higher and Additional rate taxpayers. If you pay higher or additional rate tax, you could save over £623 a parent, a year on your childcare costs.
 
 
4. How will I know whether I will drop below the national living wage or national minimum wage?
 
Each pay period, when we send your childcare voucher order to your employer, they will calculate your hourly rate again based on your remaining gross wage.
 
Your new hourly rate must not fall below the national living wage (if you're aged 25 and over) or national minimum wage (if you're under 25). If your new hourly rate does drop below the national living wage or national minimum wage, you will need to reduce the value of your childcare voucher order.

If your working hours vary, you need to make sure your childcare voucher order doesn't bring your salary below national living wage or national minimum wage throughout the year. 
You can use our online savings and eligibility calculator to see how much you can order, whilst staying above the national living/minimum wage, and how much you can save.
 
 
5. Will childcare vouchers affect my eligibility for other employee benefits?
 
Ordering childcare vouchers may affect:
 

 

If you have a student loan, your childcare voucher order will reduce your income.

 
 
6. Why does my employer have to carry out a basic earnings assessment?
 
If you joined the scheme on or after 6 April 2011, at the beginning of each tax year your employer is required to estimate the amount of pay that you are likely to receive during that year. This ignores potential bonus and overtime payments and any salary sacrifice arrangements, but includes other known taxable benefits such as guaranteed bonus payments and London weighting. This is known as a basic earnings assessment (BEA).
 
If your estimated earnings and taxable benefi ts is equal to or below the
total of your personal allowance (£11,500) and Basic tax rate limit (UK £33,500, Scotland £31,500) for the 2017-18 tax year, you will be entitled to receive up to £55 a week in childcare vouchers. If your earnings will be higher, you will fall into either a Higher or Additional rate tax band and be able to claim £28 and £25 in childcare vouchers respectively.
This does not apply to employees who joined an employer’s scheme on or before
5 April 2011, provided they have ordered childcare vouchers at least once in the last 12-month period. This is called having protected rights.
 

 

Read our Terms and Conditions.