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What are childcare vouchers?


From 4 October 2018, childcare vouchers are closed to new entrants. Any of your employees who already take childcare vouchers are eligible to carry on doing so for as long as they need, but the scheme is closed to new entrants.

 

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 (along with cycle to work schemes and a few other benefits) were not affected by the Government's recent shake-up of salary sacrifice schemes. They are also NI exempt for employers, which 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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